South Korea's economy grew at its rapid speed in 11 years as consumption and exports recovered from the pandemic's impact, according to central bank data released Tuesday.
According to statistics from the Bank of Korea, the gross domestic product is expected to expand by 4% in 2021, reversing a year earlier when the GDP dropped by 0.9 percent, the lowest result since 1998. (BOK). The growth rate in 2021 was the greatest since 2010, when the economy grew by 6.8%. It also met the central bank's forecast for yearly growth.
The BOK predicted that the country's GDP will rise 4% in 2021 and 3% this year in November. Next month, the central bank will release an updated growth forecast. The economy is expected to have expanded 1.1 percent in the fourth quarter, up from 0.3 percent the previous quarter, according to the statistics.
South Korea has boosted government expenditure to support the economy, which has been impacted severely by the coronavirus outbreak, and to tighten social distancing controls, including two new budgets worth roughly 50 trillion won ($41.8 billion) last year.
The BOK cited increased spending, lowered antivirus limitations, high vaccination rates, and consumers' tolerance to the epidemic, as well as rising exports, as factors contributing to the general upward trend in economic growth. According to the figures, private consumption increased by 3.6 percent last year, reversing a 5 percent decline the year before.
The increase in facility investment was 8.3 percent, compared to a 7.1 percent increase a year before. Construction investment, on the other hand, fell 1.5 percent, worsening a 0.4 percent drop the year before.
Last year, government spending increased by 5.5 percent, compared to a 5% increase the year before. Despite global supply chain disruptions, exports increased by 9.7%, reversing a 1.8 percent decline in 2020. This was fueled by strong international sales of semiconductors and oil-related items.
Imports also surged by 8.4%, compared to a 3.3 percent drop a year earlier, as crude oil purchases soared, according to the report.