South Korea’s economy contracted in the fourth quarter of last year from the previous quarter, bringing annual growth down to one percent, half the pace recorded a year earlier.

According to tentative Bank of Korea(BOK) data released Thursday, the nation's real gross domestic product(GDP) shrank zero-point-three percent from the previous quarter in the October–December period while growing one-point-five percent from a year earlier.

The fourth-quarter growth rate was zero-point-five percentage points lower than the BOK’s forecast of zero-point-two percent presented two months earlier, marking the lowest since the fourth quarter of 2022, when the economy shrank zero-point-four percent. 

The central bank attributed the decline to base effects stemming from strong third-quarter growth and a slump in construction investment.

For 2025 as a whole, real GDP expanded by one percent from the previous year.

Real gross domestic income, a key indicator of households’ purchasing power, rose one-point-seven percent for the year, outpacing the growth of real GDP.