Investment in Korea

Korea - Investment
Economic growth improves moderately in Q4
According to a preliminary reading, GDP growth increased slightly to 4.1% year-on-year in the fourth quarter, from 4.0% in the third quarter.
Private consumption increased 6.3% in the fourth quarter, coming in above the third quarter's 3.3% expansion. Meanwhile, government consumption grew at the fastest pace in over a decade, expanding 8.1% (Q3: +6.5% yoy). That said, fixed investment growth fell to an over two-year low of 1.1% in the fourth quarter (Q3: +1.5% yoy).
On the external front, exports of goods and services growth fell to 6.1% in Q4, marking the worst reading since Q1 2021 (Q3: +7.2% yoy). Conversely, imports of goods and services growth picked up to reach 9.7% in Q4 (Q3: +6.6% yoy). Overall, the external sector subtracted 0.8 percentage points from the headline figure in Q4.
On a seasonally-adjusted quarter-on-quarter basis, economic growth accelerated to 1.1% in the fourth quarter, compared to the previous quarter's 0.3% expansion. Q4's reading marked the fastest increase since Q1 of last year. Taken together, the economy grew 4.0% in 2021, rebounding from the 0.9% contraction in 2020.
Commenting on the outlook, Ho Woei Chen, economist at United Overseas Bank, said:
“The sustained growth recovery in Q4 2021 despite a pick-up in domestic Covid-19 infections in December supports a positive outlook this year. We are likely to see a more moderate impact from any resurgence in infections as countries adopt an endemic approach to live with Covid-19, given that vaccination rates have reached high levels in many countries. […] Overall, we see robust external demand (in particular for technology products), gradual recovery in private consumption as well as government support measures to keep South Korea’s growth at an average of 3.0% in 2022, in line with Bank of Korea (BOK)’s and our forecasts. Uncertainties that need to be watched include more contagious Covid-19 variants, growth slowdown in China, withdrawal of monetary accommodation by global central banks and the upcoming presidential election.”
FocusEconomics panelists see the economy growing 3.0% in 2022, which is unchanged from last month’s forecast. For 2023, they see the economy growing 2.6%.
Korea - Investment Data
2015 | 2016 | 2017 | 2018 | 2019 | |
---|---|---|---|---|---|
Investment (annual variation in %) | 5.4 | 6.6 | 9.8 | -2.2 | -2.8 |
Korea Facts
Value | Change | Date | |
---|---|---|---|
Bond Yield | 1.68 | 1.55 % | Dec 31 |
Exchange Rate | 1,156 | 0.21 % | Dec 31 |
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Economic News
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