Exports likely supported South Korea’s fourth-quarter GDP growth, dampening China’s outlook, Reuters poll finds
BENGALURU (Reuters) – South Korea’s economy likely accelerated in the last quarter, boosted by strong exports and investment, but an economic slowdown in China and a rise in COVID-19 cases pose a significant risk, according to a Reuters poll.
Asia’s fourth-largest economy is expected to have seen seasonally-adjusted growth of 0.9% in the fourth quarter, according to median forecasts from 10 economists, compared with a rise of 0.3% in the previous quarter.
However, the survey showed that growth in annual terms probably slowed to a median of 3.7%, based on a higher sample of 16 economists, from 4.0% in the third quarter, partly in due to the above-trend expansion recorded over the comparable period in 2020.
The data will be released on January 25.
“Private consumption is very likely to have weakened somewhat due to the spread of COVID-19 in Korea, but strong exports and investment supported growth in the fourth quarter,” Chun Kyu-yeon said. economist at Hana Financial Investment in Seoul.
South Korea’s recovery from a pandemic-triggered economic crisis has been largely driven by robust exports, which grew at their fastest pace in 11 years in 2021. By destination, exports to China, the United States United and European Union grew by 22.9 percent, 29.4 percent and 33.9 percent, respectively.
But a surge in COVID-19 cases, the waning effects of pandemic-related stimulus measures and an economic slowdown in China, the country’s largest trading and investment partner, will weigh heavily on the economy this year and the future. next.
“Exports continued to be a mainstay of strength, but are likely to be less of a driver of growth going forward. The ongoing slowdown in China poses another headwind,” wrote Krystal Tan, an economist at ANZ in Singapore. .
A separate Reuters poll released a week ago showed average growth of 3.9% in 2021. It is then expected to decline to 2.9% in 2022 and 2.5% in 2023.
(Reporting by Vivek Mishra; Polling by Devayani Sathyan and Tushar Goenka in BENGALURU and Jihoon Lee in SEOUL; Editing by Alex Richardson)