Home > Business > Economy

Korea's GDP shrinks 0.2% in Q1: BOK

Published: 24 Apr. 2025, 08:14 Updated: 24 Apr. 2025, 08:29

Containers are stacked at Pyeongtaek Port, Gyeonggi on April 21. [YONHAP]

The Korean economy posted negative growth for the first time in about a year in the first quarter of 2025, central bank data showed Thursday, amid a domestic political crisis and uncertainty stemming from the Donald Trump administration's sweeping tariff scheme.

The country's GDP — a key measure of economic growth — contracted 0.2 percent in the January-March period from three months earlier, according to the preliminary data from the Bank of Korea (BOK).

Asia's fourth-largest economy expanded 1.3 percent in the first quarter of 2024 but slipped into contraction in the second quarter with a 0.2 percent decline, before barely growing 0.1 percent in both the third and fourth quarters.

The negative growth came as the growth of exports slowed and domestic demand remained in the doldrums.

Former President Yoon Suk Yeol's shocking imposition of martial law on Dec. 3 caused political chaos. Yoon was removed from office on April 4.

The United States' sweeping tariff scheme has also affected the trade-dependent Korean economy. Trump earlier announced "reciprocal" tariffs that include a 25 percent tariff for Korea, though he soon decided to put their implementation on hold for 90 days.

Apart from the reciprocal tariffs, auto and steel tariffs are already in place.

The BOK earlier presented a 1.5 percent growth outlook for the Korean economy in 2025, but BOK Gov. Rhee Chang-yong told reporters last week that the forecast may have been "too optimistic," given Trump's tariff policy, including its sectoral tariffs and levies on China.

Yonhap