The bank of Korea’s accounts for the year 2005 released Wednesday say the nation's gross national income (GNI) grew 0.5 percent on-year, recording the lowest growth since 1998, when GNI plummeted to minus 8.3 percent due to the financial crisis. That is far below last year’s overall economic growth rate, which stood at 4 percent. It shows that the nation's GNI growth has not been able to catch up with overall economic growth for 10 consecutive years.

A researcher with the Korea Institute of Finance attributes the results to reduced export earnings due to a steep increase in international oil prices and a falling U.S. dollar while the cost of import rose. “The economy grew in terms of size, but its real purchasing power, which takes inflation into consideration, barely improved,” the researcher added.

Gross domestic product (GDP) growth has been below potential growth for three years now. Last year's GDP growth stood at 4 percent, 0.7 percentage points down from the previous year.

The BOK says the growth rate puts the country at the bottom among its major competitors in Asia. The Chinese and Indian economy grew 9.9 percent and 8 percent respectively last year, and Hong Kong and Singapore also showed strong growth of 7.3 percent and 6.4 percent.

But by quarter the nation's economy grew 2.7 percent in the first, 3.2 percent in the second, 4.5 percent in the third and 5.3 percent in the fourth quarter. This last was far above the forecast of 4.8 percent, and it is therefore safe to say that the Korean economy has begun to improve, the central bank said.

(englishnews@chosun.com )