Hong Nam-ki "Real GDP Contracted but Performed Well... Will Definitely Achieve 3.2% Growth"

Economic Contraction for the First Time in 22 Years Since 1998
Q4 Growth Rate at 1.2%, Recovery Driven by Exports and Investment

[Image source=Yonhap News]

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, stated on the 4th, "Although we could not avoid real GDP (Gross Domestic Product) contraction last year, thanks to the nationwide efforts, we relatively performed well and were able to prevent a reduction in the economic scale." Deputy Prime Minister Hong made this assessment on his Facebook, referring to the Bank of Korea's report on the fourth quarter and annual national income of last year.

According to the Bank of Korea's announcement, South Korea's real GDP growth rate (provisional) last year was -1.0%, the same as the preliminary figure. This marks a contraction for the first time in 22 years since the IMF foreign exchange crisis in 1998 (-5.1%).

Deputy Prime Minister Hong said, "The nominal GDP (in Korean won), which represents the size of our economy last year, maintained positive growth (+0.3%). Accordingly, the global ranking of our economy's size (in US dollars) is expected to rise by two steps to 10th place worldwide."

He continued, "The per capita national income (GNI) also maintained a slight increase to 37.47 million won in Korean won terms. Although it slightly decreased in US dollar terms (31,755 dollars) due to the exchange rate increase (from 1,166 won in 2019 to 1,180 won in 2020, +1.2%), it is meaningful that we maintained a per capita national income of 30,000 dollars under difficult circumstances."

Regarding the fourth quarter growth rate last year, he said, "It was revised upward by 0.1 percentage points (from 1.1% to 1.2%) compared to the preliminary figure announced in January," adding, "This indicates that the economic recovery trend centered on exports and investment in the fourth quarter was stronger."

He added, "This means that the foundation for a fast and strong economic recovery has been raised a bit higher. Using this as a stepping stone, we will strengthen the recovery trend of exports and investment, and since vaccine distribution has begun, we will also make efforts to recover domestic demand based on thorough quarantine measures to ensure that the 3.2% growth target for this year is definitely achieved."

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