South Korea's economy grew point-three percent on-quarter during the July to September period according to the Bank of Korea on Tuesday.
While the country's economy has grown for five straight quarters since the third quarter of last year the point-three percent growth is in fact a slowdown from the gains recorded in the previous quarters.
The central bank said that the slow growth was due to sluggish investments and spending amid the fourth wave of the pandemic.
Investment in facilities and construction dipped between two to three percent while private consumption dropped point-three percent as the service sector continues to struggle with pandemic-induced downturns.
"The point-3 percent growth was due to a decrease in private consumption due to the resurgence of COVID-19 cases. Also supply chain disruptions in auto chips and supply-constrains in construction items were additional factors."
Meanwhile, exports remained strong, increasing by 1.5 percent led by shipments of coal, and petroleum products driving the quarterly growth up.
However, the latest point-three percent growth casts a shadow over the four percent economic growth outlook for this year.
Earlier, the BOK set a four percent growth target for 2021, saying that the target rate can be achieved if the economy expands by more than point-6 percent on-quarter in the third and fourth quarters.
But, since the third quarter's figure was only half of what was expected, experts question whether that goal can be met.
"I think achieving four.zero percent growth would be very much challenging, probably three.nine percent. So, as long as, you know, the private consumption and domestic investment are sluggish, I think it's going to be very difficult to achieve a four.zero percent growth for the entire 2021."
Despite concerns, the central bank remained optimistic over South Korea's growth forecast.
It said that the four percent growth can be achieved, should the economy grow by about one percent on-quarter in the October to December period.
The BOK expects the nationwide vaccination drive and eased anti-virus measures from Novemberto drive up consumption and revive economic activity in the remainder of the year.
Min Suk-hyen, Arirang News.