South Korea Economic Growth Reach Lowest Point

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  • TEMPO.CO, Jakarta - South Korea's quarterly economic growth had slowed down to its lowest level in more than two years as a severe drought hit the country's agricultural sector and an outbreak of Middle East respiratory syndrome sapped consumption.

    The country's economy expanded 2.2 percent in the second quarter over a year earlier, the Bank of Korea said on Thursday, July 23, 2015. The figure is the lowest since the first quarter of 2013.

    The Bank said that private consumption turned negative as spending on services dropped while agricultural output plunged due to a drought.

    South Korea's economy was expected to decline last quarter as foreign tourists cancelled visits and people prefer to stay at home because of the MERS outbreak, which began in May and has killed 36 people.

    No new confirmed cases of MERS have been reported in South Korea since July 4 and tourist numbers have begun to recover.

    To help local restaurants, retailers, hotels and tourism industries, the government has been encouraging South Koreans to spend their vacations within the country.

    Other areas of the economy including exports and private investment were also weak.

    Meanwhile, South Korea's finance ministry is seeking parliamentary approval for a US$10.6 billion stimulus package to help with economic recovery efforts and to achieve annual growth of three percent this year.

    However, many forecasters, including South Korea's central bank, predicted that the country's economy will expand less than three percent in 2015, which would mean a slowdown from the previous two years.