Economic contraction supports rate hike pause

On a downturn: South Korean Buddhist monks pray at a makeshift memorial for the victims of the deadly Halloween crowd surge. Consumption in the country is weakening after the October 2022 tragedy. — AFP

SEOUL: South Korea’s economy shrank for the first time since the beginning of the pandemic last quarter, an outcome that supports the case for at least pausing a cycle of interest rate hikes to tackle inflation.

Gross domestic product contracted 0.4% from the previous three months as exports fell and consumer spending edged down, the Bank of Korea (BoK) said yesterday.