South Korea’s economy contracted sequentially in the fourth quarter of 2022 for the first time in more than two years due to weak exports and private consumption.
Gross domestic product shrank 0.4% from the prior quarter during the October-December period–the first sequential contraction since the second quarter of 2020–after a 0.3% expansion in the third quarter, showed preliminary Bank of Korea data on Thursday.
The latest reading–compared with a market forecast of a 0.3% contraction–showed that private consumption fell and exports declined sharply on sluggish global demand for semiconductors, petrochemicals and other Korean goods. Government spending remained strong but construction and facility investments remained weak.
Year-on-year, the economy expanded 1.4% in the fourth quarter–below the market forecast of 1.5% growth–following the prior quarter’s 3.1% growth.
For the full year of 2022, the economy grew 2.6% as projected by the Bank of Korea. The pace of growth slowed from 4.1% in 2021.
The central bank expects the economy to lose steam further this year, forecasting 1.7% growth in 2023.