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Korea’s economic growth rate recorded -1% last year due to the Corona 19 shock. It is the worst economic report card since 1998 (-5.1%), when the financial crisis went through. The household’s’consumption cliff’ has driven down the growth rate.
The Bank of Korea announced on the 26th that in 2020, real gross domestic product (GDP, breaking news) fell 1% compared to the previous year to 183.58 trillion won. The real economic growth rate was -0.99% in the second decimal place. This is higher than last year’s estimate of the growth rate of Korea by the BOK (-1.1%) and the International Monetary Fund (-1.9%). The Korean economy recorded negative growth only two times in 1980 (-1.6%) during the second oil shock and 1998 (-5.1%) during the financial crisis.
The negative growth rate was largely due to the sharp drop in private consumption, which accounts for about half of domestic GDP. Private consumption last year fell by 5% compared to 2019. It was the lowest after 1998 (-11.9%). This is the influence of consumers refraining from outside activities and suppressing spending on dining out, movie theater fees, and school expenses.
Export growth also recorded -2.5%, the worst after 1989 (-3.7%). This is because each country blocked export routes due to Corona 19, and product trade decreased as global production bases stopped operating. Construction investment growth rate recorded -0.1%.
However, the growth rate was supported as facility investment improved than expected. The increase rate of facility investment was 6.8%, the highest since 2017 (16.5%).
By industry, the manufacturing production growth rate recorded -1%, the worst since 2009 (-2.3%), just after the global financial crisis. The growth rate of service industry production was -1.2%, the worst since 1998 (-2.4%).
The quarterly growth rate of last year was -1.3% in the first quarter, -3.2% in the second quarter, 2.1% in the third quarter, and 1.1% in the fourth quarter. It is showing a rebound from the bottom of the second quarter of last year.
Reporter Kim Ik-hwan [email protected]
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