South Korea’s 2021 GDP Growth Hits A 11-year High Of 4%, Stellar Export Performance And Rebound In Consumption Lift Growth

South Korea’s economy grew 4 percent in 2021, the country's fastest pace of expansion in 11 years, despite challenges due to omicron, data released by Bank of Korea (BOK) on Tuesday (Jan 25) revealed.

The latest figure marks the export powerhouse ’s sharpest expansion since the 6.8 percent growth rate it posted in 2010. In 2020, the economy posted a dismal performance, contracting 0.9 percent. The dismal 2020 GDP numbers were the worst figures the economy had posted since 1998 -- when the nation was reeling from the 1997 Asian financial crisis contracted 0.9 percent.

Growth was powered by stellar performance in exports and a rebound in private consumption. The central bank said that exports grew 9.7 percent staging a strong comeback after a 1.8 percent contraction in 2020. Private consumption also grew by 3.6 percent last year, compared to the 5 percent contraction witnessed in 2020. Government spending expanded 1.1 percent. While Corporate capital investment expanded 8.3 percent, investment in construction shrank 1.5 percent, worse than a 0.4 percent decline a year earlier.

For the fourth quarter of last year, the fourth largest economy in Asia is estimated to have grown 1.1 percent, accelerating from the previous quarter's 0.3 percent gain, the data showed.

The central bank highlighted the increasing resilience of economy to the pandemic and the role of two rounds of stimulus worth a combined 50 trillion won ($41.6 billion) that partially funneled cash through subsidy programs.

Export performance in 2021

In 2021, South Korea's exports expanded at 25.85 percent, the fastest pace in 11 years, with total export value reaching a record high of $644.54 billion.

Exports of the country's major items, such as semiconductors and petrochemicals, logged double-digit growth, to lead the overall gains, the country's ministry said.

Exports of semiconductors jumped 29 percent year-on-year to a record $128 billion, while those of petrochemicals also surged 54.8 percent to a record $55.1 billion. Other items such as cars and steel jumped 24.2 percent and 37 percent, respectively.