The Bank of Korea, 'Preliminary 2021 Q1 National Income' on the 9th
[Asia Economy Reporter Jang Sehee] The preliminary real Gross Domestic Product (GDP) growth rate for the first quarter of this year was revised upward by 0.1 percentage points to 1.7%, compared to the flash estimate of 1.6% announced in April. This was due to strong exports amid the global economic recovery and a significant increase in facility investment.
According to the '2021 Q1 National Income (Preliminary)' report released by the Bank of Korea on the 9th, real GDP in the third quarter of this year increased by 1.7% quarter-on-quarter. This is a 0.1 percentage point upward revision from the flash estimate (1.6%) and the highest quarterly growth rate since the third quarter of last year (2.2%).
The growth contribution to real GDP in the first quarter was 1.3 percentage points from the private sector and 0.4 percentage points from the government.
By expenditure item, the private consumption growth rate was revised upward by 0.1 percentage points to 1.2%, influenced by increased consumption of durable goods and services such as education. Construction investment rose by 1.3%, a 0.9 percentage point upward revision from the flash estimate (0.4%), due to increased building construction.
Exports increased by 2.0%, driven by automobiles and mobile phones, while imports rose by 2.9%, led by machinery and equipment and primary metal products.
Growth rates by economic activity were recorded as ▲Manufacturing 4.1% ▲Agriculture, Forestry and Fisheries 2.6% ▲Services 1.5% ▲Construction -3.2%.
Real Gross National Income (GNI) in the first quarter increased by 2.4% quarter-on-quarter, the highest since the first quarter of 2016 (2.9%). GNI is calculated by adding income earned by nationals abroad to GDP and subtracting income paid to foreigners. Nominal GDP, which reflects price changes, increased by 1.9% quarter-on-quarter. Nominal GNI rose by 2.3% quarter-on-quarter.
The total savings rate in the first quarter was 37.4%, and the total investment rate was 31.0%.
The GDP deflator rose by 2.6% in the first quarter, marking the highest level since the third quarter of 2017 (3.7%). The GDP deflator had recorded negative growth for five consecutive quarters from the first quarter of 2019 to the first quarter of 2020 but has been on an upward trend since the second quarter of last year. It was 2.5% in the fourth quarter of last year.
Unlike the Consumer Price Index, which measures prices closely related to consumers, the GDP deflator reflects a comprehensive price level including the Producer Price Index, import/export price indices, exchange rates, and wages.
Meanwhile, Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki commented on the 0.1 percentage point upward revision of the first quarter growth rate, stating, "It is significant that our growth rate has been revised upward by +0.1 percentage points in the first quarter of this year, +0.1 percentage points in 2020, and +0.2 percentage points in 2019, achieving a triple level-up. The upward revisions since 2020 also indicate that our economy has rebounded stronger than expected during the process of overcoming the COVID-19 crisis."
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