By Kim Jae-won
The Korean economy grew 3.6 percent in 2011, slowing from a 6.3 percent gain from a year ago, due to weak private spending and facility investment, the central bank said Friday. Per capital income surpassed $22,000.
The Bank of Korea (BOK), however, said that increasing exports based on overseas demand from emerging markets, especially China, helped Korea to fight the bad factors.
“Poor investment in the construction industry and lowering private consumption and facility investment ratios held back Korea’s growth but the nation’s fast-rising exports supported the economy,” according to a BOK statement.
It said the growth of the Korean economy eased last year mainly due to a sharp downturn in facilities investment and a slowdown in private consumption.
The data comes as economic uncertainties linger while inflationary pressure is growing, meaning Korean policymakers face difficulties in adjusting the pace and depth of policy normalization.
BOK Governor Kim Choong-soo has been criticized for losing the chance to raise the key interest rate to normal levels as he and monetary policy meeting members have kept the benchmark rate at 3.25 percent for nine consecutive months.
The nation's gross national income (GNI), reflecting the actual purchasing power of the population, rose 1.5 percent on-year in 2011, the BOK said.
Korea's GNI per capita stood at $22,489 last year, up from $20,562 the previous year as the economy grew and the local currency rose against the U.S. dollar, the central bank added. The nation’s GNI per capital marked $17,041 in 2009, but has increased gradually since then.
Korea’s savings rate, the percentage of disposable income saved by an average person, marked 31.7 percent in 2011, down 0.4 percentage point from a year ago showing dwindling income and poor economic conditions for ordinary people.
By industry, manufacturers saw 7.2 percent growth on the back of rising exports, but products of farmers and fishermen plunged 2 percent while those of builders tumbled 4.6 percent during the same period.
Private spending, one of the main growth engines of the Korean economy, expanded 2.3 percent in 2011, after a 4.4 percent rise the previous year.
Facility investment grew 3.7 percent in 2011, a sharp drop from 25 percent a year earlier, while construction investment declined 5 percent, according to the central bank.
Total exports, which combine goods and services, increased 9.5 percent last year from 2010, while total imports grew 6.5 percent during the same period.