SKorea's Economy Slows Amid Waning Overseas Demand

Published January 26, 2012 5:45AM (EST)

SEOUL, South Korea (AP) — South Korea's economy grew at its slowest pace in two years in the fourth quarter last year as manufacturing waned amid weak overseas demand, the country's central bank said Thursday.

Gross domestic product in the October-December period expanded 0.4 percent from the third quarter, the Bank of Korea said in a release. It was the slowest growth rate since the fourth quarter of 2009, when the economic growth slowed to 0.2 percent from the previous quarter.

On a year-on-year basis, the economy grew 3.4 percent for the whole and for the whole of 2011 it grew 3.6 percent.

Earlier this month, the central bank kept its benchmark interest rate unchanged at 3.25 percent for a seventh consecutive month, citing a global slowdown and the sovereign debt crisis in Europe.

In the final quarter of last year, growth rates for consumer spending and capital and construction spending were weak and exports also decreased, the bank said.

Consumer spending dropped 0.4 percent because of weak expenditures on goods while investment in facilities fell 5.2 percent as investment on machinery and transport equipment decreased, the release said.

Construction investment decreased 0.3 percent while exports and imports fell 1.5 percent and 3.1 percent, respectively, it said.

By Salon Staff

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