BBC Home
Explore the BBC
BBC News
Launch consoleBBC NEWS CHANNEL
Last Updated: Tuesday, 23 March, 2004, 10:32 GMT
S Korea economy slows to a crawl
Traders on the Seoul stock market
The markets have been spooked by political turmoil
South Korea's economy grew by 3.1% in 2003, its slowest pace since the Asian financial crisis of 1997, the central bank has said.

Weak consumption and low corporate investment levels were blamed for the modest performance.

But there was rapid growth in the final quarter, signalling that recovery may be round the corner.

In recent weeks, Korean markets have been hit by the crisis around the impeachment of President Roh Moo-hyun.

Some good news

The opposition-controlled parliament has accused Mr Roh - who has served just one year of his five-year term - for breaking election law.

The country's Constitutional Court is currently considering the impeachment.

Roy Moo-hyun
Mr Roh's impeachment may not halt recovery
In 2003, private consumption contracted 1.4% while investment in plants dropped 1.5%, compared with a 7.5% rise in 2002.

But the fourth-quarter figure showed the economy had bottomed out, central bank director general Cho Sung-Jong said.

"With fourth quarter GDP growth considerably higher than the second and third quarters, we could say that the economy is in a recovery phase led by exports," he said.

The economy surged 2.7% in the October to December quarter - its fastest rate in nearly two years.

It will take time before we see any meaningful recovery in consumption and investment
Economist Lee Hyo-Keun
Mr Cho said the growth was the result of strong exports in the information technology sector.

But Daewoo Securities economist Lee Hyo-Keun said many people would delay investment decisions until after the elections.

"It will take time before we see any meaningful recovery in consumption and investment," he added.

The government has proposed a tax cut on cars, air conditioners, televisions and other leisure products in an attempt to stimulate consumption.

The government is aiming for 5% growth this year.

Court reviews S Korea impeachment
01 Apr 04  |  Asia-Pacific
Markets reeling in South Korea
12 Mar 04  |  Business
S Korean economy set for growth
18 Nov 03  |  Business
Korean card debt hits new record
06 Feb 04  |  Business

The BBC is not responsible for the content of external internet sites


News Front Page | World | UK | England | Northern Ireland | Scotland | Wales | Politics
Business | Entertainment | Science/Nature | Technology | Health | Education
Have Your Say | Magazine | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
Americas Africa Europe Middle East South Asia Asia Pacific