South Korea logs best growth in 11 years

South Korea's economy grew in 2021 at the fastest pace for 11 years thanks to robust exports and strong activity in the service sector, the central bank said Tuesday.

The 4.0 per cent expansion, which came in line with forecasts, was the best performance since 2010 and came despite the pandemic hurting global supply chains.

The strong data will give the Bank of Korea some room to further tighten interest rates as it looks to battle inflation, which is sitting at a decade high.

Bank officials have lifted the benchmark rate three times since August -- the latest hike this month took them to 1.25 per cent -- and have indicated more this year.

South Korea is home to leading technology firms including Samsung Electronics, the world's top smartphone maker and whose chips are used in a wide range of devices.

Exports jumped nearly 10 per cent in a sharp turnaround from 2020 when they contracted 1.8 per cent as the pandemic forced governments around the world to shut down their economies to battle the Covid spread.

Domestic consumption increased 3.6 per cent, having contracted five per cent the year before.