Q2 GDP Beats On The Upside

Q2 GDP beat expectations comfortably. We rose 0.7% QoQ versus 0.4% expected. This kept YoY close to 3.0%, (2.9% actual versus 2.6% expected). Consumption (+3%) and government spending (+1.1%) were the positives, offsetting a fall in exports and business related investment. These trends were reflected in the industry level data as well, where much of the strength was in services related industries. Manufacturing activity fell -1.1% in the quarter.

• The strong private consumption result for Q2 is obviously prior to the recent 50bps hike from the BoK. However, the central bank has been tightening for a number of quarters now, so the result may give the central bank some confidence its tightening path is not going to derail economic growth aggressively.
• Note early tomorrow consumer confidence figures print for July, so that will be an important update in terms of the consumer outlook.