South Korea’s Q1 growth slows as expected, but investments up

SEOUL - Korea’s GDP grew 2.4% y/y in Q1, down from 2.7% in the previous quarter but marginally above market expectations of 2.3% growth. Notably, facilities investments saw strong growth of 5.7% y/y, up from 4.2% in the previous quarter.

Sequentially, growth rose to 0.8% q/q, higher than the 0.3% in Q4, suggesting growth momentum has largely been sustained, albeit at an unimpressive rate.
With Q1 GDP growing at 2.4%, ANZ Bank is maintaining its forecast that GDP will expand by 3.1% in 2015, but says that, to achieve this, Korea needs to grow by 3.4% in Q2-Q4.
“As the Government rolled out a set of easing measures - such as raising the ceiling of the special loans programme in March, property sector easing in Q3 2014, and three interest rate cuts since H2 2014, we believe Korea will be able to meet this growth forecast,” ANZ says.
“The Q1 GDP figure may prompt the Finance Ministry to lower its 2015 growth projection from the current level of 3.8%.” www.live.anz.com (ATI).