South Korea’s Economic Growth Falls Short in Q4

Investing.com — South Korea’s economy grew less than expected in the fourth quarter, central bank estimates showed on Thursday, as the country grappled with increased political upheaval.

Key Economic Indicators

• Gross Domestic Product (GDP) grew 0.1% quarter-on-quarter in the three months to Dec 31, below expectations of 0.2%.
• Year-on-year GDP slowed to 1.2% from 1.5%, also missing estimates of 1.4%.

Factors Contributing to Economic Slowdown

The weak economic figures were attributed to heightened political turmoil in December, particularly following the impeachment of President Yun Suk Yeol and his unsuccessful attempt to declare martial law.

The turmoil exacerbated existing pressures on the slowing economy, characterized by reduced household spending, a potential property market crisis, and declining export demand.

Future Monetary Policy

The data has intensified expectations for further interest rate cuts by the Bank of Korea to bolster the economy. The central bank had initiated an easing cycle in 2024 but opted to maintain steady rates at a recent meeting.