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South Korean economy growth slowed in third quarter

The gross domestic product (GDP) of South Korean economy expanded by 0.6% in third quarter of the year, due to lower export and problems of the country’s industry. The failure of the market debut of the Samsung’s smartphone Galaxy Note 7 also had negative impact to the economy. The exports of smartphones has a significant impact on third quarter result of GDP, as it decreased more than the preliminary estimates. The central bank originally reported that growth in the third quarter will amount to 0.7% after an increase of 0.8% in the spring.

The world market leader Samsung withdraw its smartphone Galaxy Note 7 less than two months after being released for sale. Previously, dozens of devices self-inflamed. With almost 500,000 employees and revenue of about 200 billion USD, Samsung is the largest company of South Korea.

South Korea will be able to achieve its target for growth of 2.7% this year if the achieved expansion in the range of 0.1-0.4% in fourth quarter.

The South Korean industry declined by 0.9% during the period from July to September, being hit by problems of Samsung Electronics and strikes by unionized workers in the local car manufacturers.

The growth rate of private consumption halved to 0.5% in the third quarter compared to the previous growth, while investment in equipment increased by only 0.2%, which is much lower rate compared to the previous three months.

In contrast, the construction sector registered a growth of 3.7%, faster than the increase a quarter earlier thanks to growth in construction of residential and non-residential buildings.

Gross national income (at market prices) also declined by 0.4% in the third quarter due to worsening terms of trade. This indicator declined for two consecutive quarters for the first time since the financial crisis of 2008-2009.

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