South Korea grows 1.5% in fourth quarter, missing forecasts as domestic demand weakens

South Korea grows 1.5% in fourth quarter, missing forecasts as domestic demand weakens

Published Wed, Jan 21 2026

6:13 PM EST

INCHEON, SOUTH KOREA - MAY 22: Shoppers look at goods at a Wal-Mart store May 22, 2006 in Incheon, South Korea.

Chung Sung-jun | Getty Images News | Getty Images

South Korea's economic growth slowed in the final quarter of last year amid weakening domestic demand as the impact from fiscal stimulus dissipated.

The economy expanded 1.5% in the October to December period from a year earlier, according to the official advance estimates, missing economists' forecast for a 1.9% growth. That was compared against the 1.8% growth in the prior quarter when the economy expanded at its fastest pace in over a year.

On a quarterly basis, gross domestic product contracted 0.3%, marking a sharp slowdown from the 1.3% growth in the third quarter last year and disappointing economists' expectations for 0.1% rate.

South Korean president Lee Jae Myung and American counterpart Donald Trump reached a trade agreement in November, which included $150 billion of Korean investment in the U.S. shipbuilding sector and an additional $200 billion earmarked for an investment pledge.

In exchange, the Trump administration agreed to reduce tariffs on South Korean cars and auto parts to 15% from 25%.

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