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제목 Korea’s GDP Growth in the Fourth Quarter of 2021

Korea’s GDP Growth in the Fourth Quarter of 2021

The Korean economy finished the year 2021 in strong shape, with its gross domestic product (GDP) growing by an estimated 4% despite growing concerns about the rapid spread of Omicron. That is the highest growth rate in 11 years, suggesting that the economy is recovering fast in the face of an unrelenting pandemic. The economy regained the recovery momentum in the fourth quarter of 2021, recording a GDP growth of 1.1% versus 0.3% in the previous quarter, thanks to consumer spending pickup, export gains, and fiscal support. The growth rate for the fourth quarter in annual terms was 4.1%. 


(Source: Bank of Korea as of January 25, 2022)



Consumer spending grew by 1.7% in the fourth quarter due to eased social distancing measures, which led to an increase in consumption in the hospitality, dining, and transportation sectors. Government spending also increased by 1.1%, driven by a rise in health care expenditure. For the whole year, private consumption improved by 3.6%, representing a strong recovery from the previous year’s 5% contraction, while government spending increased by 5.5% from a year earlier.   

In the October – December period of 2021, exports expanded by 4.3% from three months earlier, backed by semiconductors and petroleum products, while imports also rose by 4.3% due to increased inbound shipments of crude oil and chemical products. In annual terms, exports bounced back from a contraction in 2020 and jumped by 9.7% in 2021 – the fastest annual pace in 11 years. Imports also surged by 8.4% in 2021 compared to a 3.3% drop in 2020.

Construction investment grew by 2.9% in the final three months of 2021 thanks to increased investment in both building construction and civil works, but declined by 1.5% for the entire year. Equipment investment increased by 8.3% in 2021 versus 7.1% in 2020, although the fourth quarter performance was lackluster with a 0.6% decline compared to the previous quarter.

In 2022, the Korean economy is expected to have another strong year of recovery from the pandemic-induced contraction of 2020, supported by consumer spending growth, export recovery, and improving business investment. However, rising inflation, supply chain disruptions, and the build-up of household debt cast a cloud over the growth outlook for 2022.       


< Quarterly Economic Growth >              (Unit: %)

 

2020

2021

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

GDP

-1.3

(1.5)

-3.2

(-2.6)

2.2

(-1.0)

1.1

(-1.1)

1.7

(1.9)

0.8

(6.0)

0.3

(4.0)

1.1

(4.1)

Consumer

Spending

-6.6

1.2

0.2

-1.3

1.2

3.6

-0.2

1.7

(6.3)

Government

Spending

1.6

1.0

0.1

-0.4

1.6

3.9

1.3

1.1

(8.1)

Construction

Investment

0.1

-2.9

-3.9

3.5

1.3

-2.3

-3.5

2.9

(-1.7)

Equipment

Investment

0.1

0.7

5.8

-0.6

6.1

1.1

-2.4

-0.6

(4.1)

Intellectual Property

Investment

1.2

1.8

0.8

1.3

0.2

1.4

0.8

1.0

(3.5)

Exports

-0.8

-15.9

16.3

5.3

2.0

-2.0

1.8

4.3

(6.1)

Imports

-2.6

-5.8

5.9

1.5

2.9

2.8

-0.7

4.3

(9.7)

*Figures in (    ) refer to year-on-year growth rates.

(Source: Bank of Korea as of January 25, 2022)

 
 
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