South Korea's economic growth slows to decade-low 2%

SEOUL, Jan. 23 (UPI) -- South Korea's economy expanded 2 percent last year to mark the weakest result since the global financial crisis in the late 2000s, the Bank of Korea said Wednesday.

The central bank said the 2019 growth rate of the country's gross domestic product is the lowest since 0.8 percent in 2009. In 2018, its on-year growth amounted to 2.7 percent.

Asia's fourth-largest economy barely topped the 2 percent plateau thanks to its robust performance during the fourth quarter when the national output rose 1.2 percent year-on-year, the highest in nine quarters.

The government raised its spending by 6.5 percent to account for three-fourths of the 2 percent growth, but pouring taxpayers' money was not enough to prop up the lackluster consumption and investment.

In particular, investment in facilities and construction decreased 8.15 percent and 3.3 percent year-on-year, respectively, to weigh on the economy.

Exports edged up merely 1.5 percent -- less than half the pace of 2018 -- amid the lingering trade disputes between the United States and China, which negatively affected the export-driven South Korean economy.

Real gross domestic income went down 0.4 percent as the terms of trade worsened due to such factors as weak semiconductor prices, the worst since 1998.

South Korea depends heavily on semiconductors as the country is home to the world's two largest memory chip manufacturers, Samsung Electronics and SK hynix.

"On the expenditure side, while the growth of government consumption expanded, construction and facilities investment contracted as private consumption expenditure and export growth slowed," the BOK said in a statement.

"On the production side, the growth of manufacturing and services slowed down, and construction continued to decline."