Korea's real gross domestic product (GDP) last year rose just 1.0% from a year earlier. Among major members of the Organization for Economic Cooperation and Development (OECD), it ranked 10th out of 14 countries that released provisional growth rates for last year. The 2024 growth rate (2.0%) ranked seventh among the 14, but last year's performance was relatively weak. If the government achieves its 2% growth target this year, Korea is expected to move out of the lower tier.
Among countries with 2024 GDP around the world's top 20, 14 released provisional growth rates for last year. Of these, India posted the highest growth at 7.4%. It was followed by Indonesia (5.1%), China (5.0%), Saudi Arabia (4.5%), Spain (2.8%), the Netherlands (1.9%), Switzerland (1.4%), the United Kingdom (1.3%), and Japan (1.1%).
Korea tied with Russia for 10th among the 14 countries. In 2024 (2.0%), it ranked seventh in growth among the 14, but it was relatively weak last year. Notably, it was the first time in 27 years that Korea's growth rate was lower than Japan's. There are also projections that the economies of the United States, Australia, and Türkiye, which will release growth rates soon, grew much more last year than Korea.
Last year, Korea's economy was hit by weakened consumer sentiment stemming from the impact of martial law and a sluggish real estate market. Some analysts said the country barely maintained 1% growth thanks to record-high semiconductor exports and the Lee Jae-myung administration's shift to expansionary fiscal policy in the second half.
The government and international organizations expect Korea's economy to grow much faster this year than last year. The government last month raised this year's growth forecast to 2.0% from 1.8%. The International Monetary Fund (IMF) last month revised up Korea's growth outlook to 1.9% from 1.8%. That is higher than the 1.8% average for advanced economies, including the United States, Europe, and Japan. It is also the ninth highest among the top 20 countries by GDP.
With semiconductor exports continuing to rise this year, analysts say consumer sentiment will improve as the government's expansionary fiscal policy and the Bank of Korea's interest rate cuts take effect.