Seoul: Loans extended to companies in South Korea grew at a slower pace in the fourth quarter compared with the previous quarter amid sluggish demand from the construction sector, central bank data showed Monday.

According to Yonhap News Agency, the outstanding loans extended to local companies reached 2,026.1 trillion won (US$1.36 trillion) as of end-December, up 8.6 trillion won from three months earlier. This increase marks a deceleration from the previous quarter, when loans expanded by 20.2 trillion won.

By sector, loans to manufacturing firms rose 1.2 trillion won from three months earlier, and those in the service sector expanded by 9.3 trillion won. However, loans in the construction sector shrank by 2.9 trillion won in the fourth quarter, marking the sixth consecutive quarterly decline.

By purpose, operating funds increased by 2 trillion won, slowing from a 13.6 trillion-won rise seen in the previous quarter. Facility investment loans advanced 6.6 trillion won, growing by the same level as seen three months ago, the data showed.