SEOUL, Mar. 10 (AJP) — South Korea confirmed that its economy contracted in the fourth quarter of 2025, while full-year growth slowed to its weakest pace in five years amid a slump in construction and slowed investment activity.
According to final data released by the Bank of Korea on Tuesday, real gross domestic product (GDP) fell 0.2 percent from the previous quarter in the October–December period, marking a return to contraction after earlier gains in the year.
The decline reflected weakness in key sectors of the economy. Manufacturing output dropped 1.5 percent from the previous quarter, while construction shrank 4.5 percent as both building and civil engineering projects slowed.
The services sector expanded 0.6 percent, supported by gains in finance, healthcare and social services.
On the expenditure side, private consumption rose 0.3 percent, mostly on health care spending, while government consumption increased 1.3 percent largely due to higher health insurance payouts.
Construction investment fell 3.5 percent and facility investment declined 1.7 percent, while exports slipped 1.7 percent from the previous quarter.
For the full year, South Korea’s economy grew 1.0 percent in 2025, sharply slowing from 2.0 percent in 2024 and marking the weakest expansion since the pandemic-hit year of 2020.
Nominal GDP reached 2,663.3 trillion won last year, up 4.2 percent from the previous year but down 0.1 percent to about $1.87 trillion when converted to U.S. dollar, as the Korean won averaged a record low of 1,439 per dollar during the year.
Gross national income per capita stood at 52.4 million won, up 4.6 percent from a year earlier. In dollar terms, however, it rose only 0.3 percent to $36,855, leaving Korea’s per-capita income in the $36,000 range for a third consecutive year as currency weakness offset domestic income gains.
The GDP deflator, a broad measure of price levels across the economy, rose 3.1 percent in 2025.
Real gross national income (GNI) expanded 1.4 percent in the fourth quarter, reflecting improved terms of trade and higher overseas income receipts.
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