A man walks past an electronic screen showing South Korea’s benchmark stock index surpassing 5,000 points in a foreign exchange dealing room at the Hana Bank headquarters in Seoul on January 22, 2026 (Jung Yeon-je) \u00b7 Jung Yeon-je\/AFP\/AFP <\/p>\n
South Korea\u00a0logged its slowest growth in half a decade in 2025, the country’s central bank said Thursday, while exports rose on the back of a boom in artificial intelligence.<\/p>\n
Asia’s fourth-largest economy has struggled with sluggish demand, a troubled housing market and the fallout of former president Yoon Suk Yeol’s martial law declaration, which plunged the country into political chaos.<\/p>\n
Last year’s one percent growth was the slowest since 2020, when the economy shrank following the outbreak of Covid-19.<\/p>\n
Exports were a bright spot, rising by 4.1 percent, the country’s central bank said, while imports were up 3.8 percent.<\/p>\n
“The growth of exports continued and the growth of private consumption and government consumption expanded,” it said.<\/p>\n
A decline in construction investment widened, it added, linked to persistent trouble in the real estate market.<\/p>\n
“The decline in construction widened and the growth of manufacturing slowed,” the central bank said.<\/p>\n
The economy also contracted in the October\u2013December period, the central bank added.<\/p>\n
An official said that the slump was expected due to the “base effect” from strong growth in the third quarter.<\/p>\n
But the weak construction investment also played a role in dragging down overall growth, he said.<\/p>\n
The central bank had projected in its November report that the economy would grow 1.8 percent this year, citing “a recovery in domestic demand and a robust semiconductor cycle”.<\/p>\n
South Korea is home to key semiconductor manufacturers — Samsung Electronics and SK hynix — whose products have become crucial to sustaining and further expanding infrastructure for the global artificial intelligence market.<\/p>\n
On the back of robust demand, the benchmark index Kospi broke 5,000 for the first time on Thursday.<\/p>\n
“Today’s rally is being driven mainly by semiconductor manufacturers, especially Samsung Electronics and SK hynix, amid growing expectations of robust earnings in the sector,” Chung Hae-chang, analyst at Daishin Securities, told AFP.<\/p>\n
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