S. Korea's economy shrinks 0.2 pct in Q1, unchanged from earlier estimate: BOK
The South Korean economy contracted 0.2 percent in the first quarter of this year, unchanged from an earlier estimate, central bank data showed Thursday, due mainly to a domestic political crisis and uncertainties stemming from U.S. President Donald Trump's administration's aggressive tariff scheme.
The country's real gross domestic product (GDP) -- a key measure of economic growth -- contracted 0.2 percent in the January-March period from three months earlier, which marked the first negative growth in nine months, according to the preliminary data from the Bank of Korea (BOK).
The South Korean economy had expanded 1.3 percent in the first quarter of 2024 but slipped into contraction in the second quarter with a 0.2 percent decline before posting 0.1 percent growth in both the third and fourth quarters.
The negative growth came as former President Yoon Suk Yeol's imposition of martial law on Dec. 3 and the subsequent political chaos dampened domestic demand.
The U.S.' sweeping tariff scheme has also affected the trade-dependent South Korean economy.
Trump announced reciprocal tariffs, including a 25 percent levy on South Korean goods, though implementation was later postponed for 90 days. Trade negotiations are currently under way between South Korea and the United States, with the two sides aiming to reach a "package" agreement on trade and related issues by July 8, when the 90-day suspension of U.S. tariffs will end.
Last week, the central bank sharply lowered its outlook for South Korea's economic growth this year to 0.8 percent from its previous forecast of 1.5 percent, citing sagging consumption and slowing export growth amid uncertainties stemming from Washington's tariff measures. (Yonhap)
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