Korea’s economy grew at a slower pace than earlier estimated in the second quarter of this year due to weaker demand and sluggish exports, data showed on Thursday.

The Bank of Korea said Korea’s gross domestic product grew by a revised 0.3 percent in the second quarter compared to the previous three months, down from an earlier estimate of 0.4 percent.

The slower growth is expected to mount pressure on the central bank to cut interests rate again to spur growth. The central bank froze the key rate at 3 percent last month after making a surprise rate cut in July.

“The growth rate considerably slowed last quarter as domestic demand and exports remained sluggish,” Jung Yung-taek, head of the BOK’s national accounts division, said at a press meeting.

The BOK also said the real gross national income grew by 1.2 percent compared to the previous quarter thanks to the improvements in terms of trade, while the nominal GNI dropped by 0.2 percent as the nominal GDP fell due to worsened profitability.

Consumption in the private sector also rose by 0.4 percent due to increased spending on durables.

Equipment investment and construction investment fell by 7 percent and 0.4 percent, respectively. The construction sector, especially, remained lackluster as the local market economy continued to slump.

Exports of goods decreased by 1.4 percent in the second quarter led by the decrease in automobile exports and petrochemical goods, matching its earlier estimate. Imports also fell by 1.8 percent last quarter.

In terms of industries, manufacturing shrank by 0.2 percent and construction by 2.7 percent. The service industry, though, grew by 0.5 percent on-quarter led by the financial as well as information and technology sectors.

The nation’s savings rate marked 31.2 percent in the second quarter, not much different from the 31.3 percent in the first quarter. The investment rate dropped by 1.8 percentage points on-quarter to 27.7 percent. The GDP deflator rose by 1.2 percent.

By Park Min-young (claire@heraldcorp.com)