South Korea slips in global growth ranking

Seoul

South Korea’s economy grew just 0.066% in the last quarter of 2024, placing it 29th out of 37 major global economies, according to a new report by the Bank of Korea (BOK). This drop was mainly due to weak domestic demand and political uncertainty, including fallout from a martial law declaration by former President Yoon Seok Yeol in December.

Among the 37 economies, Ireland led with 3.61% growth, followed by Denmark, Turkey, China, and Portugal. The United States ranked 17th with 0.61% growth, while Japan placed 20th at 0.56%.

South Korea’s ranking has been falling since mid-2023. After standing at 6th place in Q1 2023 with 1.3% growth, the country dropped to 32nd in Q2 with negative 0.23%. It briefly recovered to 26th in Q3 with 0.1% growth, but slipped again by the end of the year.

The BOK blamed the poor Q4 performance on sluggish private consumption and a slowdown in construction investment. Political instability also hurt public confidence and investor interest.

The outlook for the first quarter of 2025 is not much better. South Korea’s exports in January fell 9.1% year-on-year to $49.81 billion — the first decline in 16 months. Economists now doubt the central bank’s 0.2% growth forecast for Q1.

Park Jeong-woo, an economist at Nomura Securities, warned that growth might be as low as 0.1%, or even negative, if current trends continue. The full effect of U.S. tariffs has yet to hit, making recovery more difficult.

South Korea now faces tough challenges ahead to regain economic momentum.