South Korea’s economy contracted in the final quarter of 2022 for the first time in two- and-a-half times, as a post-pandemic spending spree faded and global trade tumbled, according to central bank estimates. Gross domestic product (GDP) shrank 4 percent in the October- December period from the former quarter, the Bank of Korea said on Thursday, after a 0.3 percent gain in the July- September quarter. Economists in a Reuters news agency had anticipated a 0.3 percent fall. Fourth- quarter 2022 GDP was 1.4 percent more advanced than a time before, compared with a 3.1 percent periodic gain seen in the third quarter and the 1.5 percent cast in the bean.
The central bank estimated that in 2022, the full-time value of Asia’s fourth-largest frugality had been 2.6 percent bigger than in 2021, when it showed growth of 4.1 percent. The average growth in full- time GDP for 2017 to 2021 was 2.3 percent a time. A variety of profitable pointers in September revealed the precarious state of the South Korean economy. Foreign exchange reserves have tumbled by the biggest periphery since the global fiscal extremity. The win has fallen to a 13- time low against the US. The country has recorded a six-month trade deficiency, while interest rates are being hiked. Kang Sung- jin, a professor of economics at Korea University, said a fiscal extremity akin to those of the history wasn’t on the cards, but the frugality would go through a period of stagflation as growth is read to be slightly above 2 per cent this time and affectation is anticipated to be in the 5 percent range.
He said domestic interest rates and China’s profitable recovery will both have a major influence on profitable prospects. While raising interest rates to match the Fed’s position is vital to help a foreign exchange request extremity, high debt and the corresponding negative impact on the real estate request may be the central bank’s top concern, said Choi Pae- kun, an economics professor at Konkuk University.
