Market Update: We break down the business implications, market impact, and expert insights related to Market Update: Korean economy grows 1% in 2025, while Q4 GDP contracts 0.2%: BOK – Full Analysis.
Containers ready for export are piled up at a port in Busan on March 6. [YONHAP]
The Korean economy expanded 1 percent in 2025 amid strong exports but posted negative growth in the fourth quarter, central bank data showed Tuesday.
The country’s real GDP — a key measure of economic growth — contracted 0.2 percent from the previous quarter in the October to December period, compared with its earlier estimate of a 0.3 percent contraction, according to the preliminary data from the Bank of Korea (BOK).
The revision came after including December economic data that had not been available for the earlier estimate. By component, government consumption, construction investment and exports were all revised upward from the advance reading.
It marked the country’s first quarterly contraction since the January to March period of last year, when the economy shrank 0.2 percent.
On an on-year basis, GDP grew 1.6 percent in the fourth quarter, down from a 1.8 percent on-year expansion in the prior quarter.
By industry, fourth-quarter growth rates were minus 1.5 percent for manufacturing, 0.6 percent for services, minus 4.5 percent for construction and 4.7 percent for agriculture, forestry and fisheries.
For the entire year of 2025, the economy expanded 1 percent, matching the BOK’s earlier estimate and slowing from the previous year’s 2 percent growth.
The data also showed that the country’s per capita gross national income (GNI) stood at $36,855 in 2025, marking a 0.3 percent increase from a year earlier.
This was the third consecutive year that Korea’s per capita GNI remained in the $36,000 range. After first topping $30,000 in 2014, the figure rose steadily and came close to $38,000 in 2021, before falling back to the $35,000 range in 2022 amid a sharp drop in the won’s value. It recovered to $36,195 in 2023, but growth then slowed to 1.5 percent in 2024 and 0.3 percent in 2025, leaving the figure stuck in the $36,000 range for three straight years.
In terms of the Korean won, the GNI climbed 4.6 percent amid the weakness of the local currency, the BOK said.
BY LIM JEONG-WON, YONHAP [[email protected]]