S. Korea economy logs best annual growth in 11 years | Inquirer Business

S. Korea economy logs best annual growth in 11 years

/ 06:11 PM January 25, 2022

Pedestrians cross a road in front of the Bank of Korea headquarters in Seoul on January 14, 2022, after South Korea’s central bank raised its key policy rate by 0.25 percentage point to 1.25 percent. (Photo by Jung Yeon-je / AFP)

SEOUL — South Korea’s economy grew in 2021 at the fastest pace for 11 years thanks to robust exports and strong activity in the service sector, the central bank said Tuesday.

The 4.0 percent expansion, which came in line with forecasts, was the best performance since 2010 and came despite the pandemic hurting global supply chains.

Article continues after this advertisement

The strong data will give the Bank of Korea some room to further tighten interest rates as it looks to battle inflation, which is sitting at a decade high.

FEATURED STORIES

Bank officials have lifted the benchmark rate three times since August — the latest hike this month took them to 1.25 percent — and have indicated more this year.

South Korea is home to leading technology firms including Samsung Electronics, the world’s top smartphone maker and whose chips are used in a wide range of devices.

Article continues after this advertisement

Exports jumped nearly 10 percent in a sharp turnaround from 2020 when they contracted 1.8 percent as the pandemic forced governments around the world to shut down their economies to battle the Covid spread.

Article continues after this advertisement

Domestic consumption increased 3.6 percent, having contracted five percent the year before.

Article continues after this advertisement

But the construction shrunk 2.2 percent, the BOK data showed, continuing a trend of negative growth from the previous year.

“On the production side, while the decline in construction was sustained, manufacturing and services reversed to an increase,” the central bank said in a statement.

Article continues after this advertisement

In the fourth quarter, GDP grew 4.1 percent on-year.

The central bank has raised its benchmark rate three times since August — the latest hike this month took them to 1.25 percent — and has indicated it could make the same move later this year owing to increased fears about inflation, which is sitting around a decade high.

RELATED STORIES

This decade’s growth champions

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our daily newsletter

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

S. Korea, Asean agree to quicken customs procedure for their FTA

TAGS: economy, Growth, South Korea

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our newsletter!

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

© Copyright 1997-2024 INQUIRER.net | All Rights Reserved

This is an information message

We use cookies to enhance your experience. By continuing, you agree to our use of cookies. Learn more here.