The South Korean economy grew faster than expected in the final quarter of last year.
The Bank of Korea reported on Tuesday that Gross domestic product (GDP) in South Korea grew at a seasonally adjusted rate of 1.1% from the previous quarter. The Q4 figures comfortably surpassed the median estimate of 0.7%. The fourth-quarter figures also follow the 1% expansion recorded in the third quarter of a difficult and challenging year.
The strong end to the year meant that the annual contraction was limited to 1.0%. This represents one of the smallest GDP contractions amongst the OECD nations (Organization for Economic Co-operation and Development).
Lloyd Chan, an economist at Oxford Economics said:
“Recovery momentum should gather pace from the second quarter onwards, led by strong export prospects as global growth and 5G deployment pick up speed,”
“A vaccine rollout around February should also stimulate domestic demand, as it would reduce the need for stringent containment measures.”
Lloyd Chan
The South Korean economy has shown strong reliance and growth since Q2 of 2020. The second quarter saw its sharpest downturn since 2008.
December exports increased 12.6% on an annual basis, the largest expansion recorded in over two years.
Exports rose 5.2% in Q4 from Q3 which helped offset a 1.7% fall in private consumption due to heightened COVID-19 social-distancing measures in place.
Fragile Recovery Amidst Third Wave of Coronavirus
However, the ecoomic situation in South Korea is delicate. In Deecember, he number of jobs plummeted at its sharpest rate in more than two decades.
On an annual basis, the South Korean economy contracted 1.4% in Q4. This was less than the 1.7% decline predicted by analysts.
The strong economic news sent Samsung shares 26% higher.
