July 24, 2019 / 11:02 PM / 4 months ago

S.Korea Q2 GDP rebounds from Q1 drop, led by government spending

SEOUL, July 25 (Reuters) - South Korea’s economy rebounded more than expected in the second quarter after contracting in the previous three-month period, helped by a big rise in government spending, preliminary central bank estimates showed on Thursday.

Gross domestic product grew by a seasonally adjusted 1.1% in the April-June period from the first quarter, Bank of Korea data showed, slightly beating the median forecast of 1.0% growth from a Reuters survey of 12 economists.

Private consumption, which generates nearly half of South Korean GDP, gained 0.7% in the second quarter from the January-March period after a 0.1% rise in the first quarter, while construction spending turned to growth of 1.4% from a 0.8% decline.

Capital investment expanded 2.4% in the April-June period on-quarter, rebounding from a 9.1% loss in the first quarter - the worst quarterly performance in 21 years.

From a year earlier, Asia’s fourth-largest economy grew 2.1% in the second quarter, compared with 2.0% growth forecast in the poll and 1.7% growth in the first quarter, the central bank estimated.

South Korea’s economy shrank 0.4% in the first quarter due to delays in government spending at a time when private investment also slowed. (Reporting by Joori Roh and Choonsik Yoo; editing by Jacqueline Wong and G Crosse)

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