Reports by the Bank of Korea on Thursday, revealed Korea’s Gross Domestic Product fell 5.6 per cent in the fourth quarter compared to previous three months.

The biggest sectors dragging down fourth quarter GDP were manufacturing with a 12 per cent decline, construction with 2.9 per cent and services by 1.2 per cent.

On the expenditure side, private consumption declined by 4.8 percent, as expenditure on durables dropped sharply and expenditure on most other items weakened as well. Facilities investment decreased by 16.1 percent, owing to the weakness of machinery investment, and construction investment fell 4.0 percent, led by a deepening reduction in building construction. Exports of goods declined by 11.9 percent, due to decreases in exports of semiconductors and wireless communication equipment. Imports fell 13 percent as well.

2009 outlooks are still in positive territory, yet the worst in over a decade. South Korea’s economy will grow just 0.7 percent this year, the slowest since the Asian financial crisis a decade ago, hit by the deepening global downturn, the country’s top government research agency said on Wednesday.

The central bank this month cut its key interest rate to a record low of 2.5 percent, the fifth reduction since October.

Full Press Release can be found on the Bank of Korea website.

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