Gross domestic product in the final period of last year contracted 0.4% from the previous quarter, the Bank of Korea said.

The reading comes after the BoK hiked borrowing costs for the tenth time in 18 months in early January, as part of its drive to tame inflation.

The figures could provide monetary policymakers room to slow their pace of hikes, as central banks around the world look to tone down their tightening moves as the effects of last year’s moves kick in.

Still, consumer inflation, which hit five percent in December, continues to be a major concern for the BoK.

“Private consumption fell 0.4% due to a decrease in consumption of goods and services, (including) home appliances, clothing, accommodation, food and entertainment,” the central bank said in a statement.

“Exports decreased by 5.8% mainly in semiconductors and chemicals,” it added.

Imports fell 4.6% in the quarter owing to decreased imports of basic metals and crude oil, according to the bank.

Still the economy grew 1.4% on-year in the quarter and 2.6% for the whole of 2022.

For 2023, the central bank has estimated that the country’s economy will grow around 1.7%, and inflation will be around 3.6%.