S. Korea's economy grows 2% y/y in 2024 amid weak consumption, construction sector

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The South Korean economy marked a two-percent annual growth last year slightly below earlier projections.

Our correspondent Lee Soo-jin reports.

South Korea's economy only showed modest growth in 2024.

That's according to data from the Bank of Korea released on Thursday which shows that the country's gross domestic product a key indicator of economic growth grew 2 percent on-year in 2024.

This was lower than both the central bank's November forecast of 2-point-2 percent and the government's forecast of 2-point-1 percent.

"After our November forecast, political uncertainty in the country grew, and economic sentiment weakened which then impacted private consumption. Construction investment also remained sluggish as orders remained weak."

In 2024,.. private consumption rose 1-point-1 percent, which was lower than the 1-point-8 percent increase of the year before while construction investment entered into negative territory.

But as exports saw a sharp rise, jumping to 6-point-9 percent from 3-point-9 percent in 2023,

leading economic growth, while modest, to be higher than that of last year's 1-point-4 percent on solid exports, a rise after three straight years of decline.

As for the fourth quarter, economic growth expanded only point-1 percent on-quarter,.. and was also lower than the central bank's forecast.

The central bank mainly attributed this to smaller growth in private and public spending as well as negative growth in construction investment.

This follows an on-quarter increase of 1-point-3 percent in the first quarter, negative growth of point-2 percent in the second, and point-1 percent in the third quarter.

With last year's economic growth hovering below forecasts, there are rising concerns about South Korea's economic growth this year, fueled by factors such as U.S. President Donald Trump's tariffs.

"Korean economy has been dependent on international trade and export to the United States. Multinational enterprises have promised to build a factory in the United States to avoid tariffs but as long as they make use of some parts from China they are still subject to tariffs."

The Bank of Korea on Monday lowered this year's GDP growth forecast to as low as 1-point-6 percent, and the government to 1-point-8 percent in its 2025 economy policy plans released early this month.

Lee Soo-jin, Arirang News.