SOUTH KOREA’S economy expanded at the fastest pace in 11 years in 2021 helped by a jump in exports and construction activity, tempering declines in capital investment and a slow recovery in the coronavirus-hit service sectors.

Record exports drove the rebound but swathes of the economy have fallen behind. Jobs are still vanishing across manufacturing and service sectors. Hours after Bank of Korea data showed the economy expanded 4 percent last year, hundreds of small business owners plan to gather near the National Assembly in Seoul to shave their heads in protest against social distancing rules that have hammered retail and service sector sales.

Gross domestic product (GDP) grew 1.1 percent in the October-to-December period from the prior three months, data from the Bank of Korea (BOK) showed yesterday. That was in line with economists forecasts.

From a year earlier, the economy expanded 4.1 percent in the fourth quarter, while annual growth in 2021 rose 4 percent, matching the Bank of Korea’s earlier forecast for the biggest gain since 2010.

The acceleration supports the central bank’s view that the overall economy is maintaining sufficient momentum as the BOK moves away from its emergency stimulus settings.

The bank has increased its benchmark rate three times since initiating a tightening cycle in August, and signaled it could hike borrowing costs further as inflation becomes a major concern.

Exports have been the economy’s mainstay in 2021, with the nation’s shipments hitting a record value last year as global trade recovered from the pandemic and tech demand continued to soar. The data showed exports kept growing in the fourth quarter, expanding at a faster pace of 4.3 percent.

Private consumption also picked up, growing 1.7 percent in the last quarter.(SD-Agencies)