Asia’s fourth-largest economy is experiencing an economic slowdown with investment dipping and its exports declining due to falling demand in the Eurozone.
Gross domestic product (GDP) expanded by 0.4% in the April to June period. In the previous three months it grew 0.9%.
The economy grew 2.4% from the same period the previous year.
The central bank is under pressure to further ease policies by lowering the interest rate.
The Bank of Korea unexpectedly cut its key interest rate to 3% from 3.25% in the first reduction for three years.
“If growth rate is this low, it shows the conditions are quite serious,” said Yum Sang-Hoon of SK Securities.
SK’s domestic consumption does not seem very convincing to the policy makers to offset the decline in foreign sales.
According to the analysts, South Korea’s economy will take a longer time to recover.
