Financial News: South Korea Q4 GDP Contracts 0.3% On Quarter

South Korea Q4 GDP Contracts 0.3% On Quarter

01/21/2026 - 18:43:00 (RTTNews)

(RTTNews) - South Korea's gross domestic product shrank a seasonally adjusted 0.3 percent on quarter in the fourth quarter of 2025, the Bank of Korea said in Thursday's preliminary reading.

That missed expectations for an increase of 0.1 percent following the 1.3 percent gain in the previous three months.

Real gross domestic income (GDI) increased 0.8 percent on quarter.

On the expenditure side, private consumption grew by 0.3 percent, as expenditures on services increased while expenditures on goods decreased. Government consumption rose by 0.6 percent, mainly due to expenditures on health care benefits.

Construction investment shrank by 3.9 percent, as building construction and civil engineering both decreased. Facilities investment decreased by 1.8 percent, led by a decrease in transportation equipment.

Exports decreased by 2.1 percent, as motor vehicles and machinery and equipment decreased. Imports decreased by 1.7 percent, as natural gas and motor vehicles decreased.

On the production side, agriculture, forestry and fishing expanded 4.6 percent, owing to an increase in crop yield. Manufacturing fell 1.5 percent, mainly due to decreases in transportation equipment and machinery and equipment.

Electricity, gas and water supply shrank by 9.2 percent, mainly due to a decrease in electricity. Construction shed 5.0 percent, as building construction and civil engineering both decreased. Services rose 0.6 percent, as finance and insurance and human health and social work increased, though wholesale and retail trade, accommodation and food services decreased.

On an annualized basis, GDP rose 1.5 percent - again missing forecasts for 1.9 percent and down from 1.8 percent in the third quarter.

For all of 2025, GDP was up 1.0 percent - slowing from 2.0 percent in 2024.

On the expenditure side, the growth of exports for the year continued and the growth of private consumption and government consumption expanded, while the decline in construction investment widened.

On the production side, the growth of services expanded, while the decline in construction widened and the growth of manufacturing slowed.

Real GDI expanded by 1.7 percent, increasing more than real GDP (1.0 percent).

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