S. Korea’s Economy Shrinks as Consumption, Investment Lose Steam

Indicators
South Korea’s Surprise Contraction Points to Broad Fragility
South Korea’s economy shrank in the final quarter of 2025 due to a broad pullback in demand, underscoring the challenge for authorities whose policy options to stimulate growth are constrained by a wobbly won and mounting financial risks.
Gross domestic product contracted 0.3% in the three months through December from the previous quarter, the Bank of Korea said Thursday. That marked a sharp slowdown from the revised 1.3% growth in the prior quarter and missed the median estimate for a 0.2% expansion in a Bloomberg survey. For 2025 as a whole, the economy expanded 1%, in line with estimates.