South Korea's economy contracted by more than 4 percent in the fourth quarter of 2008 from the third quarter, a much sharper decline than a previous projection for a 1.6 percent contraction, the Hankyoreh newspaper reported, citing a Bank of Korea official.
"We came up with an estimate before the January 9 monetary policy meeting that fourth-quarter GDP posted a more-than-four-percent drop from the third quarter," the paper quoted an unidentified high-ranking Bank of Korea official as saying. The central bank slashed the base rate by 50 basis points to a record-low 2.50 percent on Friday, warning that the economy has been in a rapid slump due to sluggish demand both at home and abroad.
The Bank of Korea declined to confirm the report, saying only that preliminary estimates for the fourth-quarter GDP figures were expected to be released on January 22. Separately, the Maeil Business Newspaper reported, citing the Ministry of Knowledge Economy, that the country's exports contracted 39.3 percent in the first 10 days of January from the year-ago period due to the deepening global economic downturn.