Roundup: S. Korea's economic growth falls to two-year low in Q4

South Korea's economic growth fell to the lowest in more than two years in the fourth quarter as some unusual factors, such as less fiscal spending caused by lack of tax revenue, weighed down on the economy, central bank data showed Friday.

Real gross domestic product (GDP) grew 0.4 percent in the fourth quarter of 2014 on a quarterly basis, according to the Bank of Korea (BOK). It was the lowest since the first quarter of 2009 when it recorded a 0.1-percent gain.

The quarterly growth increased from 0.4 percent in the third quarter of 2012 to 1.1 percent in the third quarter of 2013 before falling down to 0.5 percent in the second quarter of 2014 when a deadly ferry disaster, which left more than 300 people dead or missing, dented private consumption.

The figure rebounded to 0.9 percent in the third quarter of last year, but it declined again to 0.4 percent the next quarter.

For the whole year of 2014, the GDP expanded 3.3 percent. It was up from a 3-percent expansion in 2013 but was much lower than the BOK's growth outlook of more than 4 percent estimated a year earlier.

The low growth came as the government spent less than expected in the fourth quarter amid lack of tax revenue caused by economic slowdown. The BOK cut its 2015 growth forecast to 3.4 percent from an earlier estimate of 3.9 percent for the lackluster fourth- quarter growth.

BOK Governor Lee Ju-yeol told reporters after the January rate- setting meeting that the economy would increase 1 percent on average in 2015 on a quarterly basis, expressing his positive growth outlook despite the downward revision. The 2014 quarterly growth was 0.7 percent on average.

The central bank kept its benchmark interest rate on hold at a record low of 2 percent in January, maintaining its wait-and-see stance for three straight months. The bank lowered the policy rate by 25 basis points in August and October each in 2014.

Other factors, which "temporarily" dented the fourth-quarter expansion, included tighter regulations on subsidies for mobile devices and marriage reduction on growing expenses for livelihood and childcare.

Exports, which account for about half of the economy, reduced 0. 3 percent during the October-December period from three months earlier. It stemmed from weak demand for locally-made LCD display panels and ships, keeping a downward trend for two straight quarters.

Construction investment declined 9.2 percent in the quarter, posting the largest reduction since the first quarter of 1998 when the foreign exchange crisis hit the economy. The decline was caused by less government spending on infrastructure development.

Private consumption gained 0.5 percent during the quarter, but it was down from a 1-percent expansion in the prior quarter. Imports slid 0.6 percent, reflecting sluggish domestic demand and low global oil prices.

Facility investment jumped 5.6 percent in the fourth quarter from a 0.5-percent retreat in the previous quarter. Investment in intellectual property rights inched up 0.1 percent.

By production, activity among manufacturers reduced 0.3 percent in the quarter, keeping falling for the second consecutive quarter. It was the first two-quarter decline in about 6 years.

Production among builders decreased 3.3 percent. Those for service companies rallied 0.7 percent, but it was down from a 1.4- percent increase in the third quarter. Endi