Households in Asia's fourth largest economy, among the most indebted globally, are feeling the stress of a cumulative 300 basis points of interest rate hikes by the Bank of Korea since mid-2021, leading to a slowdown in spending.

Gross domestic product (GDP) for the Oct-Dec period grew 0.5% quarter-on-quarter on a seasonally adjusted basis, according to the median forecast of 25 economists in the Jan. 15-22 poll, slightly slower than 0.6% in the previous quarter.

Forecasts ranged from 0.1% to 0.9%, highlighting uncertainties facing the economy. The data will be released on Jan. 25.

"Growth in the fourth quarter is expected to be at a similar pace as in the third quarter. Private consumption was likely sluggish amid high interest rates," said Ha Keon-hyeong, an economist at Shinhan Securities.

"But, growth will stay robust, despite weak domestic demand, on growing exports of main products such as semiconductors and automobiles."

After a downturn in most of 2023, exports in the trade reliant economy - a closely watched gauge for global trade - picked up pace towards the end of the year thanks to a surge in chip exports.

But weak demand in China, South Korea's biggest trading partner and a key driver of the global economy, could disrupt the recent recovery.

On a year-on-year basis, GDP was expected to have expanded 2.1% in the fourth quarter, according to the median forecast of 27 economists, faster than 1.4% in the preceding quarter.

If realised, that would be the fastest growth rate since Q3 2022.

Economic growth was forecast at 2.1% this year, in line with the central bank's projection, a separate Reuters poll showed.

"In 2024 we foresee a more balanced condition between exports and domestic demand, as the pace of semiconductor recovery normalises and consumption is supported by the utilisation of excess savings," said Oh Suk-tae, economist at Societe Generale.