Commercial and residential buildings seen from the roof of the World Tower Lotte Corp. at sunset in Seoul, South Korea, on Tuesday, November 28, 2023.
Bloomberg | Bloomberg | Getty images
South Korea’s GDP contracted 0.1% year after year in the first quarter, according to advanced figures, marking the first contraction in its economy from the fourth quarter of 2020.
The GDP figure lost the 0.1% increase expected by a Reuters survey, and is a reversal compared to the 1.2% increase in the last quarter of 2024.
The data of the Bank of Korea showed that the fall was mainly due to a drop in construction, and the sector hired 12.4% year after year.
In a basic basic, GDP was reduced to 0.2%, returning to the profit of 0.1% in the last quarter of 2024.
In his monetary policy statement on April 17, the Bank of Korea had noticed that the growth of GDP of South Korea is expected to fall under its February or 1.5%prognosis. The Central Bank had heroes rates at 2.75% at the April meeting.
The Bok pointed out that internal economic growth has been weaker than expected, since domestic demand and exports have slowed due to prolonged political uncertainties and deteriorated commercial conditions.
A April 17 note by Jeff NG, head of Macro strategy of Asia in Sumitomo Mitsui Banking Corporation, expected the deceleration, added that it can be more cuts by the BOK “in the coming months.” He predicts the following rate cut in May.
The first quarter of South Korea has been marked with political uncertainty, since the political trials of former president Yoon Suk Yeol and Prime Minister have Duck-Soo prolonged.
The Constitutional Court attacked the accusation of Han in March and restored it as an interim president, before withdrawing Yoon from the position on April 4. South Korea will go to the polls on June 3 to select a new president.
The country -led economy has also been achieved by the agitation of the commercial war. While the president of the United States, Donald Trump, had temporarily suspended his “reciprocal tariffs” of the blanket on April 9, South Korea is still subject to a 25% tariff on steel and cars, which are some of the country’s largest exports to the United States.
Hyundai and Kia of South Korea are among the eight best selling brands in the United States, the country is also the fourth largest steel exporter to the United States.
The launch of GDP also occurs when a South Korean team addresses the US for commercial conversations, with the interim president Han, according to reports, saying that conversations with the United States to pave the way for a mutually beneficial result.
The Ministry of Commerce, Industry and Economics of South Korea said Thursday that the agenda of the meeting with the United States is being coordinated and not yet ended.
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