South Korea's economy records highest growth in 8 years

South Korea's economy grew more than expected in the last quarter of 2010, posting an increase for the eighth consecutive quarter, the Bank of Korea said on Wednesday.

The gross domestic product (GDP) of South Korea rose 0.5 percent in the Oct.-Dec. period compared with the previous quarter.

Markets had expected South Korea’s GDP to grow 0.4 percent in the fourth quarter last year, following a 0.7 percent increase in the previous quarter.

Manufacturing posted a decline of 0.7 percent in the quarter mainly led by a fall in production of electric machinery.

Also, growth of the construction sector decreased by 5.3 percent in the last quarter due to reduced activity in residential building construction and civil engineering.

However, services sector grew 1.3 percent, boosted by an increase in recreational, cultural and sporting, financial intermediation and transport and storage services.

Private consumption rose 0.3 percent as the spending increased on items such as cars and clothes. Real gross domestic income went up by 0.3 percent in the quarter.

Increase in exports of general machinery and equipment and wireless communication apparatuses pushed up the overall exports from the country by 2.4 percent in the fourth quarter.

Overall, real GDP rose 6.1 percent in 2010, the highest rate of growth since 2002. The growth was mainly led by buoyancy of exports and the ensuing pick up in manufacturing and facilities investment, the bank said.