SEOUL, South Korea (AP) â€” South Korea's quarterly growth slowed to the lowest in more than two years as a severe drought hit agriculture & an outbreak of Middle East respiratory syndrome sapped consumption.
The economy expanded 2.2 percent in the second quarter over a year earlier, the Bank of Korea said Thursday. That's the lowest since the first quarter of 2013. Asia's fourth-largest economy eked out 0.3 percent growth from the previous quarter.
The bank said private consumption turned negative as spending on services dropped while agricultural output plunged due to a drought.
p>South Korea's economy was expected to ebb last quarter as foreign tourists cancelled visits & people stayed home because of the MERS outbreak which began in May & has killed 36 people.
No new confirmed cases of MERS have been reported in South Korea since July 4 & tourist numbers have begun to recover.
To assist local restaurants, retailers, hotels & tourism industries, the government has been encouraging South Koreans to spend their vacations within South Korea.
Other areas of the economy including exports & private investment were moreover weak.
South Korea's finance ministry is seeking parliamentary approval for a $10.6 billion stimulus package to aid recovery & to achieve annual growth of 3 percent this year.
But many forecasters, including South Korea's central bank, predict that the country's economy will expand less than 3 percent in 2015, which would mean a slowdown from the previous two years.
South KoreaBank of Korea
Source: “Associated Press”