South Korea records slow economic growth at 2.7%

South Korea’s economy expanded at 2.7 percent in 2018, the slowest growth for six years, with weakness in exports casting a cloud over the future outlook.

However, it grew at the fastest pace in three quarters in the last three months of 2018 due to a jump in government spending.

Korea's gross domestic product grew by a seasonally adjusted 1.0% in the final quarter from the prior three months. That represented an acceleration on 0.6% growth in the economy and beat the median forecast of economists who had tipped a similar rate of expansion.

Year on year, the economy grew 3.1 percent in the fourth quarter. This marked the fastest expansion in five quarters, beating the expectation of 2.8 percent seen in the poll and the 2 percent expansion in the third quarter.

The annual figure reflected a global economic slowdown and South Korea’s economic exposure to China, which is embroiled in a trade war with the United States.

The data came a day after China reported its slowest growth in nearly three decades last year. Around a quarter of South Korea's go to China, so its economy is especially vulnerable to swings in the economic fortunes of its neighbour. Korean shipments shrank on-year in both November and December.

Declining memory-chip prices led to the first drop in Korea's semiconductor exports in more than two years in December, customs data show. Korea is home to Samsung Electronics Co. and other global chip suppliers.

The Bank of Korea in October trimmed its growth forecast to 2.7% this year.

Most economists expect the central bank will revise down its growth and inflation outlook this year while standing pat on interest rates when it meets on Thursday.