S. Korea's GDP grows 1.4 pct in 2023

SEOUL, Jan. 25 (Xinhua) -- South Korea's gross domestic product (GDP) marked the lowest growth in three years in 2023 due to sluggish consumption, caused by high interest rates and inflation, central bank data showed Thursday.

The seasonally-adjusted real GDP, adjusted for inflation, grew 1.4 percent in 2023 compared with the previous year, according to the Bank of Korea (BOK).

It was the lowest increase since 2020 when the real GDP declined 0.7 percent amid the COVID-19 pandemic. Except for 2020, it marked the lowest growth since 2009 when the global financial crisis roiled the Asian economy.

Export, which accounts for about half of the export-driven economy, gained 2.8 percent in 2023 after advancing 3.4 percent in the previous year on the back of the delayed recovery in the semiconductor sector.

Import climbed 3.0 percent last year, down from an increase of 3.5 percent in the previous year.

Private consumption, another growth engine of the economy, added 1.8 percent in 2023 after expanding 4.1 percent in 2022.

The faltering consumption was attributed to the still high inflation and interest rates.

Consumer prices went up 3.6 percent in 2023 after surging 5.1 percent in the previous year.

The BOK had left its policy rate unchanged at 3.50 percent since January last year, after hiking it by 3.0 percentage points for the past one and a half years.

Fiscal spending increased 1.3 percent last year, sharply down from an expansion of 4.0 percent in the previous year.

Investment in the construction sector rose 1.4 percent, while facility investment was up 0.5 percent.

By industry, the seasonally-adjusted production in the manufacturing sector gained 1.0 percent last year, but output in the electricity, natural gas and tap water tumbled 4.5 percent.

Production in the construction and service industries picked up 2.8 percent and 2.0 percent each.

Real gross domestic income (GDI) rebounded 1.4 percent in 2023 after sliding 1.0 percent in the prior year.

During the October-December quarter of 2023, the real GDP grew 0.6 percent compared to the previous quarter.

The real GDP was up 0.3 percent in the first quarter, 0.6 percent in the second quarter and 0.6 percent in the third quarter last year.

Private consumption added 0.2 percent in the fourth quarter on a quarterly basis, lower than a growth of 0.3 percent in the previous quarter.

Fiscal spending climbed 0.4 percent, but construction investment retreated 4.2 percent in the cited quarter.

Outbound shipment expanded 2.6 percent in the fourth quarter, and import gained 1.0 percent.