South Korea's economy ekes out a small growth, backed by 'revenge spending'

Even arsenic the planetary system is headed into a recession, South Korea's system saw a tiny maturation backed by what 1 expert attributed to "revenge spending" arsenic the state reopens.

Gross home merchandise roseate 0.3% for the July-September period, according to Bank of Korea data — the slowest quarterly maturation seen successful a year. It grew by 0.7% successful the erstwhile quarter.

"I deliberation that the momentum domestically is alternatively resilient," said Kathleen Oh, Bank of America's Korea economist connected CNBC's "Squawk Box Asia."

"Consumption is holding up beardown with the reopening and pent-up request successful services, we're really seeing rather beardown 'revenge spending' successful leisure, amusement and travel," she said, adding that home request is apt to enactment continued maturation until the remainder of this year.

South Korea's 3rd 4th GDP study showed maturation was backed mostly by user spending and concern successful facilities, which grew 1.9% and 5% respectively.

According to the Korea Culture and Tourism Institute, the full spending for tourism and leisure activities from January to October was astir 67 trillion won ($47.2 billion). While it was much than 5% little than the aforesaid play successful 2019, earlier the pandemic, it inactive saw a much than 21% leap from past year.

Spending dropped much than 28% successful 2020 successful the aforesaid play successful 2019 and maintained akin levels successful 2021.

"Private depletion maintained an wide robust gait of increase," Goldman Sachs analysts said successful a enactment connected Thursday, adding that it was stronger than expected and driven by spending connected automobiles and services.

Economists astatine ING besides said, "Reopening-boosted pent-up consumer spending slowed portion concern showed a much resilient recovery."

ING economists expect South Korea to look a recession successful 2023.

"Based connected the grim outlook for depletion and exports from precocious released data, we support our presumption that the system volition acquisition a mean recession aboriginal adjacent year," they said successful a note.

Oh from Bank of America besides said she was a batch much bearish connected the economy's outlook for adjacent year.

"It's the outer request oregon the outer situation that's been putting unit wide connected the accumulation broadside oregon the manufacturing side," she said.

Economists astatine Goldman Sachs precocious downgraded their views for South Korea's maturation for 2023 from 1.7% to 1.4%.

"The main reasons for our much bearish maturation views are existent and prospective weakness successful outer demand," the economists said successful a note.

They pointed toward a imaginable for spillovers from a planetary sluggish system to home request arsenic good arsenic section headwinds including monetary tightening and, successful the lawsuit of South Korea, fiscal consolidation.