Global trade tensions continue to wreak havoc on global economic growth, with South Korea being the latest economy to be impacted. South Korea’s Q3 GDP growth slowed down to 0.4% from the 1.0% growth seen in Q2 2019. The figure came in slightly below economists’ expectations for a reading of 0.5% for the period.

Trade continued to support economic growth with exports growing at 4.1% in Q3 vs. 2.0% in Q2 2019, coming into positive territory after contracting in two consecutive quarters. However, private consumption remained weak, gaining only by 0.1% while the construction sector witnessed a 5.2% contraction in the third quarter of the year.

According to a recent Reuters poll, economists expect South Korea’s GDP growth to touch 2.0% in 2019, well below the 2.7% growth experienced in 2018. Global trade tensions on account of the trade war between the US and China, South Korea’s trade dispute with Japan and an overall slowdown in global economic growth have had a significant impact on the nation’s export-oriented economy.

To offset the weakness in GDP growth, South Korea’s government has rolled out stimulus measures worth $5 billion while the Bank of Korea has cut its interest rate twice over the past three months, down to 1.25%. This is the lowest level for interest rates since 2017.