South Korea GDP Q4 2025 Shrinks 0.3% as Investment Slump Defies Forecasts
South Korea GDP Q4 2025 contracted by 0.3%, missing expectations. A slump in construction and facilities investment drove the unexpected decline.
Expectations of a modest recovery were dashed. South Korea's economy delivered a surprise contraction in the final months of 2025. According to reports, the economy shrank 0.3% in the fourth quarter compared to the previous three months, missing the median forecast of a 0.1% expansion.
Analyzing the South Korea GDP Q4 2025 Contraction
The downturn was primarily driven by a significant decline in construction activity and facilities investment. High interest rates and rising costs for building materials have put a chill on the real estate sector, while corporations have pulled back on capital expenditures amid global economic uncertainty. This combination has stalled the growth engine of Asia's fourth-largest economy.
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