South Korea's 2-decade low growth still likely outperformed rest

SEOUL, South Korea — South Korea recorded its worst growth in more than two decades last year, the central bank said Tuesday, but it is expected to be among the best-performing developed economies in the wake of the coronavirus pandemic.

The country's gross domestic product contracted 1% in 2020 from a year earlier, the Bank of Korea said, citing weak private spending and exports. It marks the worst annual growth since 1998, when the South Korean economy shrank 5.1% in the aftermath of the Asian financial crisis.

Still, South Korea is expected to have been among countries in the group of developed economies known as Organization for Economic Development and Cooperation (OECD) to be least affected by the pandemic.

In the final quarter of 2020, the South's economy — the world's 12th-largest — managed to grow 1.1% from the previous quarter, data showed, marking a second consecutive quarter of growth.

Broken down, the central bank said exports expanded 5.2% in the fourth quarter from three months earlier, offsetting a slump in private consumption due to toughened social distancing rules in recent weeks.

South Korea has shown signs of recovery from the virus downturn and the central bank in November forecast the economy to grow 3% in 2021, a reflection of its early success in controlling the virus and decision not to embrace sprawling lockdowns that engulfed the globe for most of last year.

Seoul's economic performance outperforms that of other economies, including developed neighbors and much more emerging economies that have struggled to contain the pandemic. For instance, the Philippines is expected to report on Thursday gross domestic product to have contracted as much as 9.5% year-on-year in 2020 after another quarterly contraction in the final 3 months.

South Korea has largely contained its coronavirus outbreak, while the pandemic has killed more than 2 million people worldwide, with widespread testing and contact-tracing.

But authorities tightened social distancing rules late last year after case numbers began to rise. — with Philstar.com