South Korea Ranks 29th in Global GDP Growth for Q4 Amid Domestic Slump

Seoul(The Uttam Hindu):  South Korea ranked 29th among 37 major economies in terms of economic growth during the fourth quarter of 2024, according to a report by the central bank on Sunday. The nation's performance was affected by weak domestic demand and growing political uncertainty. In the October-December period, South Korea's real GDP growth stood at 0.066%, placing it near the bottom of the rankings among 36 OECD member countries and China. Ireland led the list with a growth rate of 3.613%, followed by Denmark (1.849%), Turkey (1.688%), China (1.6%), and Portugal (1.542%).

The United States saw a growth of 0.607%, ranking 17th, while Japan expanded by 0.556%, ranking 20th. South Korea's GDP growth has been steadily declining since the second quarter of the previous year, when it dropped to 32nd place with a contraction of -0.228%, down from 6th place with a growth of 1.3% in the previous quarter. Though it rebounded slightly to 26th in the third quarter with a 0.1% growth, the momentum weakened again in the fourth quarter. The Bank of Korea (BOK) attributed the weak growth to persistently low domestic demand, with both private consumption and construction investment remaining sluggish. Political instability, highlighted by former President Yoon Seok Yeol's brief declaration of martial law in December, further eroded consumer confidence and investor sentiment.

Looking ahead, the outlook for the first quarter of 2025 remains grim. Domestic demand continues to falter, and export growth appears to be slowing, even before the full impact of U.S. President Donald Trump's tariff measures are realized. In January, South Korea's exports fell 9.1% year-on-year, marking the first decline in 16 months since September 2023. Experts are doubtful about the Bank of Korea's projection of 0.2% growth for the first quarter of this year. Economist Park Jeong-woo from Nomura Securities forecasts a modest 0.1% growth, adding that there’s a possibility that South Korea may even experience negative growth due to the ongoing slump in domestic demand and softening exports.