The Magazine for Asian Investors
South Korea’s GDP Growth Slows in Q1 2022
The South Korean central bank announced today that South Korea’s gross domestic product (GDP) grew by only 0.7% quarter-on-quarter in the first quarter of 2022. This slowed from the 1.2% growth in Q4/21 as consumption and investment continued to be affected by the COVID-19 outbreak and uncertainty caused by the war between Russia and Ukraine.
There are a high number of confirmed cases of COVID-19 in South Korea, and the number of cases has jumped since the beginning of the year due to the rapidly spreading Omicron strain. People are avoiding outside activities, leading to a slowdown in consumer spending.
South Korean consumer spending fell 0.5% in the first quarter after consumers cut back on spending on leisure, travel, and restaurant visits.
Construction investment fell by 2.4% and infrastructure investment by 4% in the first quarter.
The International Monetary Fund (IMF) has lowered its forecast for South Korea’s economic growth in 2022 to 2.5% from 3% previously.
