Korea’s Economic Growth Slows to 1% in 2025
South Korea’s economy experienced a modest growth of just 1 percent in 2025, according to recent data released by the Ministry of Data and Statistics. This marks a significant decline from previous years, with growth rates of 4.5 percent in 2021, 2.7 percent in 2022, and 1.6 percent in 2023. The slowdown is attributed to a decrease in construction activity and a deceleration in manufacturing growth.
Sector Performance and Regional Disparities
The mining and manufacturing sectors saw a growth of 2 percent in 2025, a notable drop from the 4.2 percent growth recorded in the previous year. Despite strong export demand for key industries such as semiconductors, automobiles, and shipbuilding, production in certain areas, particularly shipbuilding, faced significant declines. This mixed performance highlights the challenges within the manufacturing sector, where some industries are thriving while others struggle to maintain output.
Construction, on the other hand, faced a dramatic contraction of 9.3 percent, with the southwestern Honam region experiencing the steepest decline at 14 percent. This downturn in construction activity has had a ripple effect on the overall economic landscape, contributing to the slower growth rate observed in the region.
Regionally, the wider Seoul area reported a GRDP growth of 1.9 percent, buoyed by steady advancements in the services, mining, and manufacturing sectors. In stark contrast, the Honam region’s GRDP fell by 0.7 percent, primarily due to the significant drop in construction. Meanwhile, the southeastern city of Daegu and North Gyeongsang Province reported stagnant growth, remaining unchanged from the previous year. These regional disparities underscore the uneven recovery and growth patterns across South Korea’s economy.
