Seoul, March 10 (NationPress) The South Korean economy experienced a 1% growth in 2025, buoyed by robust exports, yet registered a negative contraction in the fourth quarter, as per central bank statistics released on Tuesday.

The nation’s real gross domestic product (GDP), a vital indicator of economic performance, fell by 0.2% from the prior quarter during the October-December timeframe, a revision from the earlier forecast of a 0.3% contraction, according to preliminary data from the Bank of Korea (BOK).

This marked the first quarterly downturn since the January-March quarter of the previous year, when the economy also contracted by 0.2%, as reported by Yonhap news agency.

For the full year of 2025, the economy grew by 1%, aligning with the BOK's prior projections and slowing down from the 2% growth seen in the prior year.

The economy faced an unexpected 0.2% shrinkage in the first quarter of 2025, largely due to a domestic political crisis triggered by then-President Yoon Suk Yeol's martial law declaration, along with uncertainties from U.S. President Donald Trump's significant tariff policies, which adversely affected consumer spending and hindered export growth.

However, there was a recovery in the second and third quarters, with growth rates of 0.7% and 1.3% respectively, fueled by government stimulus initiatives and strong exports during the semiconductor upcycle.

The data further indicated that the country's nominal gross national income (GNI) per capita reached US$36,855 in 2025, reflecting a 0.3% increase compared to the previous year.

In Korean won, the GNI experienced a 4.6% boost due to the depreciation of the local currency, the BOK stated.

The per capita GNI initially surpassed $30,000 in 2014 and continued to rise, approaching $38,000 in 2021, but dipped into the $35,000 range in 2022 before recovering to $36,195 in 2023.

Growth slowed to 1.5% in 2024 and 0.3% last year, maintaining the figure in the $36,000 range for three consecutive years.

In the fourth quarter, exports declined by 1.7% from the prior quarter, primarily due to reduced demand for automobiles and machinery, while imports fell by 1.5%.

Investment in construction plummeted by 3.5%, and facilities investment decreased by 1.7%, largely driven by drops in automobile and transport equipment sectors.

Private consumption saw a slight uptick of 0.3%, and government expenditure rose by 1.3% during this three-month period.

Throughout 2025, exports surged by 4.2% year-on-year, spurred by strong semiconductor demand, although this was a slowdown from the 6.8% growth of the prior year. Imports also advanced by 3.8% year-on-year.

Private spending increased by 1.3%, picking up from a 1.1% growth in the previous year.

However, construction investment saw a drastic 9.8% decline, compared to a 3.3% contraction in 2024, while facilities investment recorded a 2% year-on-year growth.

Looking ahead, the BOK projects the economy to grow by 2% in 2026, citing strong exports and a rebound in private consumption.