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Analysis of South Korea's Real GDP Announcement for 2024

Bank of Korea's Real GDP Announcement and Key Economic Trends

The real GDP growth rate for 2024 has been announced, showing a lower growth than initially anticipated.

1. GDP Preliminary Data Release Process and Significance

• GDP is announced in three stages: preliminary, provisional, and final.
• The preliminary data for this fourth quarter was released earlier than the usual late January announcement.
• The Bank of Korea projected an annual growth rate of 2.0%, but the quarter-on-quarter growth rate for the fourth quarter was very low at 0.1%.

2. Annual Growth Rate and Key Factors

• 2023 Growth Rate: 1.4% – the lowest level since 1980, excluding economic crisis periods.
• 2024 Growth Rate: 2.0% growth, but the low-growth phase continues.
• The average growth rate for 2023-2024 is estimated to be about 1.7%, a very low level.

3. Detailed Contents of the Fourth Quarter GDP

• Year-on-Year Growth Rate: 1.2%, the lowest quarterly growth rate in 2024.
• Both private consumption and government consumption have slowed down.
• Construction investment: Continues to be sluggish, particularly due to the increase in unsold houses and the reduction in new construction.
• Exports: Led the growth but shifted to a decline in the fourth quarter.

4. Economic Activities and Sectoral Growth

• Wholesale and retail trade, accommodation, and food services: Declined for four consecutive quarters, with an annual growth of -1.4%.
• Manufacturing and services industries: Slowing growth rates, remaining weak.
• Real estate and construction industry: Reduced new construction due to political risks and increased unsold housing units.

5. Business Cycle and Impact

• The recovery trend since the pandemic has not met market expectations, showing a tendency for low growth to become entrenched.
• Overall downward phase and worsening perceived economic conditions.

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< Summary >

• The Bank of Korea's announced real GDP for 2024 grew by only 0.1% quarter-on-quarter and 1.2% year-on-year.

• The contraction of private consumption, weakening domestic demand, and sluggish real estate market are major contributing factors.

• Exports still recorded high growth rates but slowed down in the fourth quarter.

• The average growth rate for 2023-2024 is about 1.7%, highlighting the entrenchment of low growth as a major economic challenge.

• Crafted by Billy Yang

• [Related Articles at Next-Korea.com]

Economic Outlook and Recovery Possibilities for 2024
Private Consumption Contraction and Domestic Demand Strategy

*YouTube Source: [경제 읽어주는 남자(김광석TV)]

– [속보] 4분기 한국 경제성장률 0.1%에 그쳐, 연간 성장률 2.0% ‘턱걸이’ [즉시분석]