The economic growth in South Korea surged beyond expectations in 4Q23 as the country’s exports performed better than the sluggish domestic demand.
The Bank of Korea (BOK) showed that the country’s GDP for 4Q23 edged up 0.6% QoQ, and the export figures were 2.6% higher. Though the imports grew 1%, it brought a net growth contribution of 0.8 percentage points, which was up from 0.5 percentage points in the previous quarter.
However, slow domestic demand, high interest rates, and the dull recovery of exports after a year-long slump in the semiconductor industry raised some concerns for analysts.
Shivaan Tandon, Emerging Asia Economist at Capital Economics, stated that analysts expected the country’s economy to be weaker in the next quarters as export growth edges lower, while domestic demand is affected by tight fiscal and monetary policy.
