SEOUL – The Gross Domestic Product (GDP) of South Korea increased by 3.1 percent in 2017, three tenths more than the figure recorded in 2016, thanks to the recovery of the global economy and the consequent increase in South Korean exports, the Bank of Korea (BoK) said on Thursday.
This marks the first time since 2014 that the South Korean economy grew above 3 percent, which appeared to be in line with the forecasts made earlier in January by the BoK, which estimated growth at 3 percent as the domestic demand continued to recover and exports likely to grow.
In 2017, South Korean exports increased by 3.6 percent, while imports grew 7.3 percent.
The BoK highlighted in its report that in 2017 private consumption in the country showed a gradual recovery as it grew only 2.6 percent while construction investment continued its rapid expansion, reaching a growth rate of 7.2 percent, and facilities investment achieved a positive result, with a high growth rate of 14.6 percent.
“While the growth of services dropped, the growth of manufacturing accelerated and construction maintained a higher level of growth,” the BoK report said.
In contrast to the good annual performance, the South Korean economy contracted 0.2 percent in the fourth quarter of 2017 compared to the previous quarter.
Although private consumption increased in the October-December period, construction investment and exports contracted, which led to the quarter-on-quarter downturn.
By 2018, the Bank of Korea hoped that the economy would continue to grow at a solid pace and that growth would rise 3 percent thanks to an increase in exports and private consumption.
As for the 2019 projections, the BoK expects the country’s economy to expand by 2.9 percent.