Seoul, Jan 23 (IANS) The South Korean economy posted weaker-than-expected growth last year amid slowing export growth, sagging domestic demand and a political crisis, central bank data showed on Thursday.
The economic expansion in the fourth quarter also came far below the earlier forecast by the Bank of Korea (BOK) as political turmoil sparked by President Yoon Suk Yeol’s shocking martial law declaration dented private spending and investment, according to the central bank.
The country’s real gross domestic product — a key measure of economic growth — increased 2 percent in 2024, according to preliminary data from the BOK, reports Yonhap news agency.
The 2024 figure was lower than the central bank’s forecast of a 2.2 per cent expansion, though the growth accelerated from a 1.4 per cent advance in 2023.
Last year’s growth was led by exports, which surged 6.9 per cent from a year earlier, compared with a 3.5 per cent on-year increase in 2023.
Private spending rose 1.1 per cent in 2024, slower than a 1.8 per cent growth the previous year.
Facility investment gained 1.8 per cent, while construction investment fell 2.7 per cent.
In the fourth quarter alone, Asia’s fourth-largest economy advanced 0.1 per cent on-quarter, far lower than the BOK’s forecast of a 0.4 per cent growth.
On a yearly basis, the economy grew 1.2 per cent in the fourth quarter, slowing from the previous quarter’s 1.5 per cent gain.
Exports inched up 0.3 per cent from three months earlier in the fourth quarter, while imports shed 0.1 per cent.
Private consumption added 0.2 per cent on-quarter, and government spending rose 0.5 per cent. Facility investment also climbed 1.6 per cent.
But construction investment dropped 3.2 per cent, the data showed.
“Heightened political uncertainties affected consumer sentiment and private spending. The situation of the construction industry was worse than expected,” BOK official Shin Seung-cheol told a press briefing.
Yoon declared a shocking martial law on Dec. 3, and the National Assembly voted to impeach him.
Yoon was arrested earlier this month and has come under investigation on charges of leading an insurrection and committing abuse of power.
South Korea had been on an economic recovery track at the beginning of 2024, but momentum has weakened as the growth of exports has slowed and domestic demand remained in the doldrums.
—IANS
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