South Korea's economic growth stayed below 1 per cent for three straight quarters, boosting concern about the prolonged low-growth trend, central bank data showed on Tuesday.
Real gross domestic product (GDP), seasonally adjusted for inflation, reached 375.04 trillion won (328.7 billion U.S. dollars) in the second quarter, up 0.7 per cent from the previous quarter, according to the Bank of Korea (BOK).
It was up from a 0.5 per cent quarterly expansion tallied in the first quarter, but the second-quarter figure marked the zero-per cent growth for the third consecutive quarter.
From a year earlier, the real GDP increased 3.2 per cent during the April-June period.
The central bank said the first-half growth met the BOK's expectations of 3.0 per cent, but it indicated an economic slump in the second half as it forecast the economy's 2016 growth at 2.7 per cent.
The ongoing restructuring, led by the government, in troubled shipbuilders and shipping lines are widely expected to pull down the economy's recovery.
The country's three major shipbuilders, including Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering, had submitted a plan to cut workforce by 30 per cent and reduce overcapacity by 20 per cent by the end of 2018.
The southeastern region, where major shipyards and ports are sited, is forecast to be hit hardest by the ongoing restructuring process, with the region's unemployment rate beginning to go higher from the first quarter of this year.
Exports, which account for about half of the economy, gained 0.9 per cent in the second quarter from the prior quarter due to demand for semiconductors as well as oil and chemical products. Imports rose at a faster pace at 1.9 per cent.
Despite the growth, concerns lingered about the exports due to uncertainties such as the falling global trade, the prolonged trend of low oil prices and China's shift into a consumption-centred economy from an exports-focused.
Private consumption, another engine for economic expansion, increased 0.9 per cent in the second quarter, turning around from a 0.2 per cent reduction in the first quarter. But, it stemmed mainly from a one-off factor such as the government's cut in consumption tax for cars and the launch of new auto models.
The country's five automakers reportedly sold 812,265 cars in the first half of this year, up 10.9 per cent from a year earlier thanks to the temporary consumption tax cut.
Massive household debts and high jobless rate among youths are expected to continue to weigh down on private consumption.
Facility investment rebounded from a 7.4 per cent decline in the first quarter to a 2.9 per cent expansion in the second quarter, but there remained uncertainties over whether local companies would increase capital spending in the second half due to the restructuring process and the still weak global trade.
Investment in the construction sector rose 2.9 per cent during the April-June period, less than halving a 6.8 per cent growth in the previous three-month period.
To bolster the lacklustre economy, South Korea's government unveiled an extra budget plan, worth 11 trillion won, for the second quarter, and the BOK lowered its benchmark interest rate to an all-time low of 1.25 per cent in June.
Despite the fiscal and monetary stimulus measures, economic outlook among economic think tanks are still bleak due to the still weak global trade and the US Federal Reserve's anticipated interest rate hike as early as September as well as potentially negative impacts from the Brexit, or British referendum to leave the European Union (EU), according to a news agency.