SEOUL, Jan. 26 (UPI) -- South Korea's GDP shrank by 1% in 2020 on fallout from the COVID-19 pandemic, the Bank of Korea announced Tuesday, marking the worst yearly growth in more than two decades but pointing toward a rebound in 2021.
For the fourth quarter, South Korea posted its second consecutive quarter of growth, expanding by 1.1% on the back of export gains.
Finance Minister Hong Nam-ki said in a Facebook post Tuesday that the results "can be evaluated as strengthening the foundation for a fast and strong economic recovery despite the third wave of the coronavirus."
Hong pointed out that fourth-quarter growth exceeded an estimate by investment banks of 0.7% and said the results showed evidence of a "crisis-resistant economy."
The 1% contraction for the year also slightly outpaced the Bank of Korea's forecast of 1.1%.
Private consumption shrank in the fourth quarter by 1.7% as South Korea battled its third wave of a COVID-19 outbreak that began in mid-November and caused tightened social distancing restrictions on many businesses.
However, exports increased by 5.2% in the quarter, driven by growth in goods such as semiconductors and chemical products, according to the Bank of Korea.
"In particular, as non-face-to-face demand surged, exports in the IT sector, our flagship industry, increased significantly, and exports to new industries such as electric vehicles and bio-health continued to increase steadily," Hong said.
President Moon Jae-in also cast the results in a positive light, pointing out that South Korea compared favorably to other top global economies.
"[T]he breaking news today is a valuable achievement that the whole population made while enduring daily sacrifices over the three waves of the coronavirus pandemic," he said, according to presidential spokesman Kang Min-seok.
South Korea weathered the economic damage from the global COVID-19 pandemic in 2020 better than its counterparts in the Organization for Economic Cooperation and Development.
Germany announced earlier this month that its economy contracted by 5% in 2020, while the OECD forecasts the United States' to shrink by 3.7%, Japan's by 5.3% and Britain's by 11.2%.
China was the only major economy to expand in 2020, reporting 2.3% growth for the year last week.
South Korea's year-on-year contraction in 2020 was the worst performance for Asia's fourth-largest economy since a 5.1% decline in 1998 at the height of the Asian financial crisis. The country also saw its largest job loss in 22 years, with the number of employed people declining by 218,000, or 0.8 percent, in 2020.
The Bank of Korea is forecasting 3% GDP growth in 2021, due to factors including strong growth in the semiconductor industry, additional economic stimulus at home and abroad and a vaccine rollout slated to begin in South Korea in February.