GDP grew 4% in 2021 on strong exports

Choi Jung-tae, head of the national accounts coordination team at the Bank of Korea, speaks at a press conference held Thursday. [BANK OF KOREA]

Korea’s economy grew 4 percent last year on strong exports.

The country’s gross domestic product (GDP) in 2021 was up 4 percent on year, according to preliminary data by the Bank of Korea on Thursday, and exports jumped 9.9 percent thanks to strong sales of semiconductors and coal and petroleum products.

Imports rose 8.5 percent due to increased imports of crude oil and chemical products.

Private spending grew 3.6 percent in 2021 as expenditures on services, like restaurants and accommodation, and semi-durable goods such as clothing increased.

Despite a surging number of cases in the fourth wave of the Covid-19 pandemic, the government has been easing social distancing rules over the past months to reduce the impact on businesses.

Government spending rose 5.5 percent in the same period due to stimulative spending and hikes in health care benefits.

Korea’s Gross National Income (GNI) per capita was $35,168 last year, up 10.3 percent from a year earlier. It was the first time the GNI per capita surpassed $35,000.

Korea’s GNI per capita surpassed $20,000 in 2006 and $30,000 in 2017.

The central bank attributed the growth to a rebound of the economy from the pandemic and the value of the Korean won against the U.S. dollar last year.

The bank was cautious about projecting when Korea’s GNI per capita could possibly hit $40,000.

Considering that it “comprehensively reflects economic growth, exchange rates and inflation, it’s difficult to make a precise prediction,” said Choi Jung-tae, head of the national accounts coordination team at the Bank of Korea, in an online press event Thursday. “If we overcome Covid-19 and show continuous economic growth, it may become possible within a number of years.”

“Last year’s GDP that was announced today is a very welcome and meaningful achievement, but we face a lot of responsibilities considering the internal and external economic factors we have recently faced,” wrote Finance Minister Hong Nam-ki on Facebook on Thursday.

He cited difficulties faced by small business owners due to the spread of the Omicron variant of Covid-19, supply chain disruptions, global inflation and the geopolitical risks around Russia and Ukraine.

“Korea’s economy has been kept in the global top 10 for two years straight,” Hong added. "The government will do our best to lead the economic recovery through thorough risk management."

GDP in the fourth quarter grew 1.2 percent compared to the previous quarter, slightly higher than a 1.1 percent projection made by the central bank in January.

BY JIN MIN-JI [jin.minji@joongang.co.kr]