South Korea’s GDP growth in 2022 has slowed down to its weakest pace in two years due to the economic recession and slowing exports, according to the central bank of South Korea. The bank reported that GDP growth slowed sharply to 2.6% in 2022, compared to 4.1% in the previous year. This decline is primarily attributed to the central bank of South Korea and other central banks worldwide adopting aggressive monetary policies.
In the fourth quarter of 2022, GDP contracted by 0.4% quarter-on-quarter after an increase of 0.3% in the third quarter. The latest data is unchanged from preliminary estimates released in January, indicating that the South Korean economy is still affected by the weakness in exports, investment, and other negative factors.
In 2022, South Korea’s exports grew only 3.2%, compared to 2021’s growth of 10.8%, indicating a significant slowdown. However, private consumption in 2022 grew by 4.3%, higher than the 3.7% growth in the previous year, driven by the government ending COVID-19 containment measures.
Unfortunately, infrastructure investment fell by 0.5% in 2022, compared with the 9% growth in 2021. Construction investment also fell by 3.5%, which was worse than the 1.6% drop in 2021. Experts predict that South Korea’s economic growth is likely to improve in the coming months, mainly driven by increased exports, which will boost demand for South Korea’s goods in foreign markets.