S Korea Economy Ranks 29th Amid Yoon Seok Yeol Challenges

Seoul, April 6: South Korea ranked 29th out of 37 major economies in terms of economic growth during the fourth quarter of 2024, as weak domestic demand and heightened political uncertainty weighed on the nation's performance, a central bank report showed on Sunday.

Key Points

South Korea ranks near bottom of OECD economies in Q4 growth

Domestic demand and political instability weigh on economic performance

Exports show first decline in 16 months

Asia's fourth-largest economy posted real gross domestic product (GDP) growth of 0.066 in the October-December period, placing it near the bottom among 36 Economic Cooperation and Development (OECD) member countries and China, according to the report by the Bank of Korea (BOK).

Ireland topped the list with a 3.613 percent growth rate, followed by Denmark with 1.849 percent, Turkey with 1.688, China with 1.6 percent and Portugal with 1.542 percent, reports Yonhap news agency.

The United States expanded by 0.607 percent to rank 17th and Japan grew 0.556 percent to place 20th.

South Korea's real GDP growth has shown a steady decline since the second quarter of last year, when it dropped to 32nd place with minus 0.228 percent from sixth place with 1.3 percent in the previous quarter.

Although it rebounded slightly to 26th in the third quarter with 0.1 percent growth, momentum weakened again by the end of the year.

The BOK attributed the sluggish growth in the fourth quarter to persistently low domestic demand, as both private consumption and construction investment remained in a prolonged slump.

Political instability, exacerbated by former President Yoon Seok Yeol's short-lived declaration of martial law in December, further dampened consumer confidence and investor sentiment.

Adding to this, the outlook for the first quarter of 2025 remains bleak.

Domestic demand continues to falter and export momentum appears to be losing steam even before the full effects of U.S. President Donald Trump's tariff measures are felt.

According to recent BOK data, South Korea's exports reached $49.81 billion in January, down 9.1 percent from a year earlier. It was the first on-year decline in 16 months since September 2023, when it fell 1.6 percent.

As a result, experts are skeptical of the central bank's projection of 0.2 percent on-quarter growth for the first quarter of this year.

"Based on economic data through February, South Korea is expected to grow just 0.1 percent in the first quarter," said Park Jeong-woo, an economist at Nomura Securities. "Given the continued slump in domestic demand and softening exports, there's even a chance the country could slip into negative growth."

Reader Comments

James K.

This is really concerning news. We need stronger economic policies to boost domestic demand. The political instability isn't helping either. Hope the government takes this seriously! 😟

Soo-Min L.

Not surprised at all. I run a small business and sales have been terrible since last fall. People just aren't spending like they used to. The martial law scare in December made everything worse.

Aiden P.

The article mentions exports declining too. That's our economic backbone! Maybe we're too dependent on certain industries? Time to diversify more aggressively.

Min-Ji Y.

I respectfully disagree with the doom-and-gloom tone. Yes, the numbers aren't great, but Korea has bounced back from worse before. Our tech sector is still strong and innovative! 💪

Thomas R.

Interesting to see Ireland at the top. What are they doing right that we could learn from? Maybe less focus on manufacturing and more on services?

Hae-Won J.

The article could have explored more about how housing prices are affecting domestic demand. That's a huge factor in why people aren't spending - all our money goes to rent! 😅

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Tags:

South Korea Economy GDP Growth OECD Yoon Seok Yeol Bank of Korea Economic Challenges