Korea's economy grows at fastest rate in 11 years thanks to exports

Reuters news agency cited data from the Central Bank of Korea on January 25, showing that the country's gross domestic product (GDP) increased by 4.0% in 2021 due to a surge in exports .

From the third quarter of 2021, the Korean economy grew at a rate of 1.1% in the October-December period.

Fourth-quarter annual growth was 4.1%, and beat the median forecast of 3.7%. Exports were the main driver of growth in the fourth quarter, up 4.3% from the previous quarter. This growth was also supported by personal consumption and construction investment, up 1.7% and 2.9% respectively.

On January 14, the Bank of Korea raised interest rates to pre-pandemic levels and signaled it could tighten further if growth and inflation pressures remain strong.

Chun Kyu Yeon, an analyst at Hana Financial Investment, said optimistically: "The economy has been boosted by exports and investment in the final months of 2021... Global demand for manufactured goods Production in South Korea will continue and consumption will improve on the basis of government spending expansion to keep growth solid this year."

Although the Korean economy has had a strong recovery, this recovery has been uneven after the effects of the COVID-19 epidemic in 2020. The recovery in spending is also not the same due to social distancing.

A recent Reuters survey of 20 economists forecast South Korea's economy would grow 2.9 percent this year, below the 3.0 percent forecast by the Bank of Korea.

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