Seoul, March 5 : South Korea’s economy grew 2 percent last year, matching an earlier estimate, amid slowing export growth, sagging domestic demand and a political crisis, central bank data showed on Wednesday.
The country’s real gross domestic product (GDP) — a key measure of economic growth — increased 2 percent last year, in line with the central bank’s estimate in January.
The 2024 growth accelerated from a 1.4 percent advance in 2023, reports Yonhap news agency.
The data also showed the country’s per capita gross national income (GNI) stood at US$36,624 in 2024, marking a 1.2 percent increase from a year earlier.
In terms of the Korean won, the GNI climbed 5.7 percent to an all-time high of 49.96 million won amid the strengthening of the dollar and the won’s weakness.
The per capita GNI surpassed the $30,000 mark for the first time in 2014.
Last year’s economic growth was led by exports, which surged 7 percent from a year earlier, compared with a 3.6 percent on-year increase in 2023.
Private spending rose 1.1 percent in 2024, slower than a 1.8 percent expansion the previous year.
Facility investment gained 1.6 percent, while construction investment dropped 3 percent.
In the fourth quarter of 2024, Asia’s fourth-largest economy grew 0.1 percent on-quarter, also unchanged from its January estimate.
On a yearly basis, the economy grew 1.2 percent in the fourth quarter, slowing from the previous quarter’s 1.5 percent gain.
The weaker quarterly expansion came as President Yoon Suk Yeol declared a shocking martial law on Dec. 3, causing a political crisis. The National Assembly voted to impeach Yoon, with the decision pending a Constitutional Court ruling.
The country is also facing multiple headwinds as domestic demand remains in the doldrums and export growth has slowed amid heated global competition and uncertainties stemming from U.S. President Donald Trump’s sweeping tariff scheme.
The BOK last week revised down its growth outlook for the South Korean economy in 2025 to 1.5 percent from its earlier forecast of 1.9 percent.
The country’s potential growth rate is at 2 percent, and this year may mark the first time ever that its yearly growth rate falls below the level.
In an effort to support growth, the central bank slashed its benchmark interest rate by a quarter percentage point to 2.75 percent late last month, marking its third rate cut in less than six months.
“As we forecast earlier, the economy is projected to grow 0.2 percent in the first quarter given data on weak exports and credit card spending,” BOK official Kang Chang-goo told a press briefing.
“It remains to be seen whether such factors as the government’s stimulus measures, the reduction of the special consumption tax and a greater investment in social infrastructure construction would help spur growth.” (IANS)