South Korea's Economy Unexpectedly Contracts As Exports Crash Most In 33 Years

For only the 4th time since 1999 (and for the first time since Lehman), South Korea's economy unexpectedly shrank in Q4 (contracting 0.4% QoQ against expectations of 0.1% expansion), busting the global-synchronized-growth narrative.

Only two analysts forecast the possibility of a contraction...

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Government spending rose 0.5% QoQ, and while private consumption rose 1.09% QoQ, construction investment tumbled 3.8% QoQ

Exports were the biggest driver - plunging 5.4% QoQ - the biggest drop since 1985...

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As Goldman notes, Korea's 2017 Q4 GDP contracted 0.2% quarter on quarter (seasonally adjusted), slowing sharply from 1.5% in Q3 and falling for the first time in nine years. The figure was well below consensus and as well as our expectations. Main points:

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