South Korea's gross domestic product surpassed expectations in the fourth quarter, rising with increased government spending, despite a slight drag on exports.

The nation's GDP grew by 1% in the fourth quarter of 2018 compared to the previous quarter, which grew by .6%, and rose by 3.1% compared to 2017's 2%, according to the Bank of Korea.

The overall economy increased by 2.7% year-over-year in 2018, a disappointing but expected rate that, according to Reuters, marked the slowest expansion in six years.

Government spending ticked up 3.1%, with rising spending on goods and health care benefits. Construction investment grew, too, by 1.2%, as investment in building construction and civil engineering rose.

Thanks to transportation investment, government spending on facilities grew, too, by 3.8%. Exports, however, shrank by 2.2%, with electrical and electronic equipment like semiconductors, falling short. Imports rose by .6%, because of imports of crude oil, coal and petroleum products.

Government spending grew at 7.1% year-over-year, the "fastest pace since the start of 2009," according to Capital Economics. 

Looser fiscal policy and increased government spending will likely help growth, but "weaker global demand is set to be a key drag on the economy," wrote Alex Holmes, Asia economist for Capital Economics, warning that the China-U.S. trade war and dipping Korean exports spell trouble to come.

Korea is known for its major auto and electronics companies such as Hyundai Motor Co. (HYMTF) , Kia Motors Corp., Samsung Electronics Co. (SSNLF) and LG Electronics Inc.