Exports Increase by 9.7%... Highest Since 2011
Continued Growth in Facility Investment and Government Consumption
[Asia Economy Reporter Jang Sehee] South Korea's economic growth rate last year recorded 4.0%. This was due to exports increasing more than expected and a brief revival in private consumption. Additionally, the effect of the government's supplementary budget (추경) also acted as a factor boosting the growth rate.
According to the '2021 4th Quarter and Annual National Income (Preliminary)' announced by the Bank of Korea on the 25th, last year's real Gross Domestic Product (GDP) recorded 4.0%. On an annual basis, this is the highest since 2010 (6.8%).
By expenditure items, private consumption and exports turned to an increase, while facility investment and government consumption continued their growth trend.
Last year, private consumption recorded 3.6%, turning to an increase, and government consumption increased by 5.5%.
Facility investment increased by 8.3%, whereas construction investment decreased by -1.5%. Exports increased by 9.7%, marking the highest since 2011 (17.2%). Imports rose by 8.4%.
By economic activity, manufacturing and service industries turned to an increase, but construction continued to decline. Manufacturing and electricity, gas, and water supply increased by 6.6% and 4.7% respectively, while construction decreased by 2.2%.
Real Gross Domestic Income (GDI) increased by 3.0% on an annual basis compared to the previous year. However, due to worsening terms of trade caused by rising oil prices, it underperformed the real GDP growth rate.
In the 4th quarter of last year, growth was 1.1%. Quarterly, after growing 1.7% in the 1st quarter, it recorded 0.8% and 0.3% in the 2nd and 3rd quarters respectively, showing a declining trend before rebounding again in the 4th quarter.
Experts agree that the level before the COVID-19 crisis has still not been recovered.
Jung Kyu-cheol, head of the Economic Forecasting Office at the Korea Development Institute (KDI), said, "Considering last year's base effect, it seems that the level before COVID-19 has still not been recovered," adding, "The two-year average growth was 1.5~1.6%, which is lower than the normal range of 1.8~2.0%."
Professor Ahn Dong-hyun of Seoul National University’s Department of Economics emphasized, "Exports increased more than expected, which raised the growth rate," and added, "This ultimately shows the importance of the private sector's role in economic growth." He also stressed, "Despite the 4.0% growth, construction is still showing a negative trend," and "The uneven recovery across industries needs to be supplemented through fiscal measures."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
