S Korea's economic growth slows due to euro

South Koreas economy grew at its slowest pace for two years in the final quarter of last year as Europes debt crisis took its toll on exports and consumer spending, the central bank said Thursday.Gross domestic product in October-December rose 0.4 percent from the previous quarter, compared to a 0.8 percent rise in the third quarter.It was the lowest quarter-on-quarter increase since 0.2 percent in October-December 2009.Year-on-year, GDP grew 3.4 percent in the fourth quarter of 2011 compared to 3.5 percent in July-September.A poll of nine economists by Dow Jones Newswires forecast a 0.5 percent quarter-on-quarter rise and a 3.5 percent year-on-year expansion.The central Bank of Korea last month tipped Asias fourth largest economy to grow 1.0 percent quarter-on-quarter and 4.0 percent year-on-year.However its governor Kim Choong-Soo cautioned early this month that the actual fourth-quarter figures would fall short of the December forecast.Amid sluggish domestic demand, exports turned negative, senior central bank official Kim Young-Bae told reporters Thursday.The sovereign debt crisis in Europe had a larger than expected impact on facility investment and private consumption. Exports, accounting for about half of GDP, declined 1.5 percent quarter-on-quarter in October-December after expanding 2.2 percent in the three months earlier.Private spending fell 0.4 percent compared to a 0.4 percent rise in the previous quarter.Facility investment dropped 5.2 percent after falling 0.8 percent in July-September, while construction investment fell 0.3 percent following a 1.8 percent rise in the third quarter.The economy grew 3.6 percent last year compared to a 6.2 percent rise in 2010.Analysts predict the pace of growth will fall further in the current quarter but do not expect a contraction.