The country’s real gross domestic product (GDP), a primary indicator of economic health, declined by 0.246% from the previous quarter during the January–March period, a South Korean news agency reported, citing figures from the Bank of Korea (BOK).
This decline was the steepest among the economies of 19 leading nations, which include the United States, Canada, Germany, France, and China.
Ireland led with the highest growth rate of 3.219%, followed by China at 1.2% and Indonesia at 1.124%.
Analysts point to a sharp downturn in domestic stability following former President Yoon Suk Yeol’s failed martial law initiative on December 3 as a key contributor to South Korea’s economic contraction.
The event rattled markets and significantly reduced household consumption.
Yoon was officially ousted from office on April 4, and a special presidential election is now set for June 3.
Adding to the strain was President Trump’s broad tariff strategy, which negatively affected South Korea’s heavily export-driven economy.
Trump introduced “reciprocal” tariffs on key trade partners last month, including a proposed 25% tariff on South Korean goods. Although the rollout has been temporarily paused for 90 days, uncertainty remains.
The BOK attributed the weak growth to a number of “unusual factors,” such as a slump in demand for advanced semiconductors, halted construction projects, and widespread wildfires.
While South Korea’s economy grew 1.3% in the first quarter of 2024, it slipped into negative territory in the second with a 0.2% contraction, and showed only slight gains of 0.1% in both the third and fourth quarters.
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