SEOUL: South Korea’s economy grew 0.6% in the third quarter (3Q) of the year, matching an earlier estimate, on the back of reviving exports and domestic demand, central bank data shows.
The country’s real gross domestic product – a key measure of economic growth – increased 0.6% on-quarter in the July-September period, according to data released on Tuesday by the Bank of Korea (BoK).
The 3Q expansion compares with the 0.6% quarter-on-quarter expansion in 2Q and the 0.3% gain in 1Q.
On a yearly basis, South Korea’s economy advanced 1.4% in 3Q, following 0.9% growth for both the 1Q and 2Q.
Asia’s fourth-largest economy has been on a recovery pace since it contracted 0.3% in 4Q last year.
For the full year, the central bank expects the economy to grow 1.4%, down from a 2.6% expansion in 2022 and 4.3% growth in 2021, amid restrictive monetary policies in major economies.
The central bank forecast that this year’s economic growth will be in line with its estimate as private spending shows signs of a modest recovery amid rising exports.
In particular, the chipmaking sector, one of the key pillars of the economy, appears to be on a recovery track as a drop in prices eased, while exports and production rose for the second consecutive quarter, the bank said.
The central bank said the 3Q expansion came as exports and domestic demand improved
The country’s exports climbed 3.4% in the July-September period, a turnaround from the previous quarter’s 0.9% decline.
Imports gained 2.3% in 3Q from the previous quarter, following a 3.7% dip the previous quarter.
The country’s exports fell for the 12th consecutive month in September amid the global economic slowdown and aggressive monetary tightening by the United States and other major economies to bring inflation under control.
Private spending also rose 0.3% in 3Q, compared with a 0.1% decline the previous quarter.
Government spending also increased 0.2% in 3Q, and construction investment increased 2.1% during the July-September period, according to the data.
South Korea’s economy has been facing uncertainty amid worries over protracted aggressive monetary tightening in major economies, including the United States, escalating geopolitical tensions, rising household debt and a slowdown in China’s economy, the country’s top trading partner.
The central bank held its key interest rate steady at 3.5% for the seventh straight time last month as it weighs a slowdown in growth amid moderating inflation.
The rate freezes came after the BoK delivered seven consecutive rate hikes from April 2022 to January 2023. — Korea Herald/ANN