South Korea Q2 GDP disappoints

The economy will gain stronger momentum in the second half of 2012, says BOK.

OCBC Treasury Research noted:

The slightly disappointing Q2 GDP data may open the room for another rate cut in August, especially in light of the falling inflationary expectations and slipping consumer confidence reported yesterday.

Not only export growth has continued to fall, but we reckon that the central may be particularly concerned with the rather steep fall in GFCF growth, which is now back in the negative at -1.5% yoy from 4.6% yoy seen in Q1.

As it is, the surprise rate cut done earlier this month has indicated that the central bank would continue to play a leading role in boosting the economy, particularly in light of what appeared to be some reluctance to pump prime the economy on the government’s part.