South Korea grows 1.5% in fourth quarter, missing forecasts as construction slump hits growth
INCHEON, SOUTH KOREA – MAY 22: Shoppers look at items at a Wal-Mart store on May 22, 2006 in Incheon, South Korea.
Chung Sung-jun | Getty Images News | Getty Images
South Korea’s economic growth slowed in the final quarter of last year as a sharp decline in construction investment and a decline in exports outpaced modest increases in consumption.
The economy grew by 1.5 percent in the October-December period compared to the previous year. preliminary forecasts of the central bankWe missed the economists’ forecast of 1.9%. Compared to this 1.8% growth in the previous quarterWhen the economy grows at its fastest pace in more than a year.
On a quarterly basis, gross domestic product contracted by 0.3%, the sharpest slowdown since the fourth quarter of 2022. Economists polled by Reuters had expected growth of 0.1%.
According to data from the Bank of Korea, construction investment decreased by 3.9% compared to the previous quarter, as both construction and civil engineering activity decreased. Facility investments fell 1.8% due to the decline in transportation equipment.
Exports decreased by 2.1% compared to the previous quarter due to the decrease in motor vehicle and machinery shipments. Supply of manufacturing and utilities, including electricity, gas and water, fell by 1.5% and 9.2% respectively.
Meanwhile, private consumption increased by 0.3% due to service expenditures, while public expenditures increased by 0.6% due to the impact of health benefits.
South Korean President Lee Jae Myung and his American counterpart Donald Trump met a trade agreement In November, this included $150 billion in Korean investment in the U.S. shipbuilding sector and an additional $200 billion allocated for investment commitments.
In return, the Trump administration agreed to reduce tariffs on South Korean cars and auto parts from 25% to 15%.
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