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S. Korean economy shrinks in Oct.-Dec. for 1st time in 10 quarters

Hong Kong travelers wearing South Korean traditional "Hanbok" costumes pose to take photos at the Gyeongbok Palace, the main royal palace during the Joseon Dynasty, and one of South Korea's well-known landmarks in Seoul, South Korea on Jan. 16, 2023. (AP Photo/Ahn Young-joon)

SEOUL (Kyodo) -- South Korea's economy shrank a real 0.4 percent in the October to December period from the preceding three months, marking the first contraction since the second quarter of 2020, central bank data showed Thursday.

    The first quarterly contraction since the early phase of the coronavirus pandemic resulted mainly from a 0.4 percent fall in private consumption amid high inflation and a 5.8 percent decrease in exports, such as semiconductors and chemical products.

    Capital spending grew 2.3 percent, slowing from a 7.9 percent increase in the July to September period, amid a surge in materials prices.

    In 2022, South Korea's economic growth slowed due to weak exports and decreased corporate investment, according to Bank of Korea data.

    The central bank estimated that the economy expanded 2.6 percent in 2022, compared with 4.1 percent growth in the previous year.

    Finance Minister Choo Kyung Ho told a meeting on Thursday that the government will fully support efforts to boost exports to help the country's economy withstand a global economic slowdown.

    "The government will focus policy resources on boosting exports and investment, such as pushing ahead with deregulation efforts and offering tax and financial support," Choo said.

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