South Korea’s growth slowed in Q4 amid political crisis

SEOUL

South Korea's economic growth slowed in the last quarter of 2024, data from the Central Bank showed on Thursday as the country struggled with the fallout from impeached President Yoon Suk Yeol's brief declaration of martial law.

"GDP in the fourth quarter expanded 0.1 percent quarter on quarter and 1.2 percent on year," the central bank said in a statement, the lowest quarterly growth rate of the year after Yoon attempted to suspend civilian rule Dec. 3.

For the full year, the economy grew by 2 percent, the Central Bank said, which was 0.2 percentage points below forecasts, amid ongoing political chaos which experts say has affected consumer confidence and domestic demand.

The 2 percent expansion for Asia's fourth-largest economy marks a 0.6 percentage point increase from 2023 growth.

In an earlier forecast for 2025 economic growth, the Bank of Korea cited the Dec. 3 martial law declaration and Dec. 29 Jeju Air plane crash that killed 179 as having "significantly dampened economic sentiment."

In that forecast the central bank also revised its full year 2025 growth forecast down to 1.6 to 1.7 percent, down from an earlier projection of 1.9 percent.

"Korea's economy continued to struggle in Q4 and we suspect that the weakness in activity could persist in the near term due to the ongoing political crisis," said Shivaan Tandon, Capital Economics.

"Domestic demand remains the main source of the weakness in the economy," he said in a note, pointing to slowing growth in consumer spending.