South Korea Economy Weakened in 2025 as Tariffs Took a Toll

South Korea’s economy contracted quarter-over-quarter in the final three months of 2025, bruised by a year of tariffs and political turmoil that slowed annual growth to a five-year low.

The export-reliant economy expanded 1.0% for the year, as the Bank of Korea had expected after lowering its forecast to account for the hit from U.S. trade policies and domestic political strife. The economy grew 2.0% in 2024.