South Korea’s growth slowest in more than 2 years

A visitor looks at a miniature model of an apartment complex which is now under construction at its showroom in Seoul March 18, 2015.

South Korean economic growth, weighed down by an outbreak of Middle Eastern Respiratory Syndrome (MERS) and persistent drought conditions, slowed sharply in the June quarter.

On a year-over-year basis, the economy grew 2.2% in the second quarter following a revised 2.5% gain in the first.

The economy expanded 2.2 per cent in the second quarter over a year earlier, the Bank of Korea said Thursday.

South Korea’s economy was expected to ebb last quarter as foreign tourists cancelled visits and people stayed home because of the MERS outbreak which began in May and has killed 36 people.

The central bank in June slashed the policy rate for a second time this year to a record-low 1.50% to spur anemic growth.

Huh said it would be unlikely for the central bank to cut rates again, given mounting household debt. In tandem, the government in July proposed a 22 trillion won ($19 billion) fiscal stimulus plan, including a 12-trillion-won extra budget.

The economy grew 0.3 per cent in the April-to-June quarter, down from 0.8 per cent in the previous quarter, Yonhap News Agency reported.

In the January-June period, the number of worldwide passengers to and from South Korea came to 30.3 million, up 13.4 percent from the same period previous year, according to the Ministry of Land, Infrastructure and Transport.