Last year’s economic expansion marked a slowdown from a 2.6% advance in 2022 and 4.3% growth in 2021. — Reuters
SEOUL: South Korea’s economy grew 1.4% last year, matching an earlier estimate, amid sluggish exports and tightening monetary policies around the globe, according to central bank data.
The country’s real gross domestic product (GDP) – a key measure of economic growth – increased 1.4% last year, in line with the central bank’s earlier estimate in January, according to preliminary data from the Bank of Korea (BoK) released yesterday.
But last year’s economic expansion marked a slowdown from a 2.6% advance in 2022 and 4.3% growth in 2021, and the lowest since a 0.7% contraction in 2020 during the Covid pandemic.
In the final quarter of last year, Asia’s fourth-largest economy advanced 0.6% quarter-on-quarter, also in line with an earlier estimate.
Asia’s fourth-largest economy has been recovering since it contracted 0.3% in the fourth quarter of 2022 in the face of aggressive monetary tightening in major countries, escalating geopolitical tensions, rising household debt and a slowdown in China’s economy, the country’s top trading partner.
Last month, the country’s central bank froze its key rate for the ninth straight session at 3.5% amid woes over slower-than-expected inflation moderation and high household debt.
The rate freezes came after the BoK delivered seven consecutive rate hikes from April 2022 to January 2023.
The central bank said last year’s expansion came as exports and domestic demand remained relatively sound.
The country’s exports climbed 3.1% last year, slowing from the previous year’s 3.4% gain, while imports also decelerated to 3.1% from 3.5%.
South Korea’s exports have marked a year-on-year drop since October 2022 amid the global economic slowdown and aggressive monetary tightening by the United States and other major economies to bring inflation under control, although outbound shipments rebounded in September.
Private spending logged a 1.8% rise last year, compared with a 4.1% advance the previous year.
Government spending also slowed to 1.3% from 4%, and construction investment increased 1.3% last year, a turnaround from a 2.8% decline, according to the data. — The Korea Herald/ANN
