Due to the influence of the political crisis in 2025, the Korean economy has rarely increased in the fourth quarter
Author: Li Zhixun
Seoul (Reuters) -The South Korean economy has almost increased in the fourth quarter of 2024, because the country's most serious political crisis in the country has damaged the already weak domestic demand and may be in Trump's second president's external outside. The risk risks has weakened economic growth in a year.
In December, South Korean President Yin Shilie was impeached and suspended for a short period of martial law. Subsequently, South Korean Prime Minister Han Dexu was impeached. Consumers and corporate confidence were suppressed by political confusion.
The high -level prediction of the Bank of Korea on Thursday showed that due to this influence, after seasonal adjustment, GDP (GDP) only increased by 0.1%over the previous quarter.
This is lower than the 0.2% increase predicted in the Reuters survey, and it is also lower than Yin's 0.5% increase in the central bank's prediction less than a week before Yin promulgated on December 3.
This fourth largest Asian economy has been struggling in 2024. After contraction of 0.2% in the second quarter, it increased by 0.1% in the third quarter, barely avoided technical recession.
What is worrying is that the political crisis of the Bank of Korea and economists expects that the political crisis will still curb economic growth this year.
An official of the Central Bank of Korea stated in the briefing: “Political uncertainty has led to a significant weakening of economic emotions, which will continue to affect the economy as the risk factors in the first quarter and the whole year.” He warned that the growth of this quarter may also be low. Expectation of the central bank. November forecast is 0.5%.
SHIVAAN TANDON, a market economist at Capital Economics, agreed: “We suspect that due to the dull political crisis and the prospects of the construction industry, economic activities may continue to weaken in the short term.”
After the data was released, although the Wall Street stock market rebounded overnight to a historical high, the benchmark KOSPI index still fell 1.1%in early trading, while Han won softened.
Trump factor
According to the Bank of Korea, the economic growth of South Korea was 2.0%in 2024 and an increase of 1.4%in the previous year. However, it is expected that growth in 2025 will slow to 1.6%or 1.7%, which is less than 2%of estimates.
From October to December, GDP increased by 1.2%year -on -year, the slowest growth rate since the second quarter of 2023.
Consumption is a main drag. Consumer expenditure increased by 0.2%in this quarter, and enterprise investment increased by 1.6%, which was lower than 0.5%and 6.5%in the previous quarter, while construction investment decreased by 3.2%.
The export increased by 0.3%, and after a decrease of 0.2% in the first quarter, a small recovery was driven by the strong demand of artificial intelligence. Essence