Lower retail spending and sluggish manufacturing have slowed down the economic growth rate of South Korea to 0.5 percent in the last three months of 2010 from 0.7 percent recorded in the previous quarter. Growth for the full year was however, recorded at an impressive eight year high of 6.1 percent, the Bank of Korea said in a statement.
Analysts are not worried about the last quarter slowdown and expect the economy to rebound back in this quarter. The central bank had raised interest rates to 2.75 percent earlier this month, making it the second such hike in the last three months.
The central bank is unlikely to raise rates in the near future after the recent data, analysts believe.
“Compared with the third quarter, the manufacturing and construction sectors showed a decline”, Bank of Korea said. “Private consumption also declined, but exports increased”, it added.
“We can say the country has now got out of the global financial crisis. The domestic economy will continue to expand every quarter this year, although there could be some ups and downs”, said Jung Youg-Taek, head of Economic Statistics at Bank of Korea.