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.
The markets have been spooked by political turmoil
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.
In 2003, private consumption contracted 1.4% while investment in plants dropped 1.5%, compared with a 7.5% rise in 2002.
Mr Roh's impeachment may not halt recovery
But the fourth-quarter figure showed the economy had bottomed out, central bank director general Cho Sung-Jong
"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.
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.