South Korea’s economy showed signs of resilience in 2023, expanding by 1.4% despite the ongoing challenges posed by the pandemic. This growth was primarily driven by a semiconductor-led recovery in exports, which helped mitigate weakness in other sectors.
According to preliminary data released by the Bank of Korea, gross domestic product (GDP) grew by 0.6% in the final quarter of the year, maintaining the same pace as the previous quarter. However, when compared to the same period in the previous year, the economy grew by an impressive 2.2%, surpassing expectations.
Analysts had predicted a quarterly growth rate of 0.5% and a year-on-year growth rate of 2.1% for the final quarter, making the actual figures even more encouraging.
The robust growth seen in the final quarter affirms that South Korea’s trade-reliant economy is steadily recovering. Despite weaknesses in construction and private consumption, exports remained strong throughout the year, buoyed by high demand for computer chips.
Looking at the full-year performance, the economy expanded by 1.4%, in line with projections by the central bank. While this is the lowest growth rate since 2020 when the pandemic first hit and led to a contraction in GDP, it is a testament to South Korea’s ability to rebound amidst adversity.
Looking ahead, the Bank of Korea has maintained its growth forecast of 2.1% for 2024, signaling optimism for continued economic recovery.
In conclusion, South Korea’s economy delivered a positive performance in 2023, fueled by a semiconductor-led export recovery. The higher-than-expected growth rates indicate that the nation is well-positioned for a sustained recovery in the coming years.
