S. Korea economic growth at three-year low in 2012

SEOUL (AFP) - South Korea's economy grew at its slowest pace for three years in 2012, as the global downturn dampened exports and domestic demand, the central bank said today.

Asia's fourth largest economy grew by 2.0 per cent over the previous year - the slowest pace since a 0.3 expansion in 2009.

The preliminary figure from the Bank of Korea showed a slight acceleration in the fourth quarter, with gross domestic product up 0.4 per cent from the July-September period.

Exports, however, which account for nearly half the national GDP, slipped 1.2 per cent from the third quarter due to falling shipments of machinery and ship vessels.

On a yearly basis, the economy grew 1.5 per cent in October-December compared to the fourth quarter of 2011 and exports were up 4.0 per cent.

Corporate investment in infrastructure slid 2.8 per cent from the previous quarter and 5.1 per cent from a year earlier, while construction investment was down 1.3 per cent from the previous quarter and 4.1 per cent from a year ago.

The 2.0 per cent growth figure for the whole of 2012 fell short of the central bank's prediction of 2.4 per cent.

The South's economy expanded 6.3 per cent in 2010 and 3.6 per cent in 2011.

"Despite signs of a recovery in exports and private consumption, weak corporate investment due to volatile forex moves and the sluggish property market will undercut growth, making the economy expand below trend for some time," Tongyang Securities economist Lee Cheol Hee told Dow Jones Newswires.

Consumer spending inched up 1.8 per cent in 2012 compared to 2.3 per cent the previous year.

South Korea, with an export-led economy, tends to mirror the fortunes of the region, and its GDP numbers are often a harbinger of broader trends in Asia.

Join ST's Telegram channel and get the latest breaking news delivered to you.