The Korea Herald


S. Korea's economy grows 0.6% in Q3, unchanged from earlier estimate

By Yonhap

Published : Dec. 5, 2023 - 10:08

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GDP Growth Trend Graph (The Bank of Korea) GDP Growth Trend Graph (The Bank of Korea)

South Korea's economy grew 0.6 percent in the third quarter of the year, matching an earlier estimate, on the back of reviving exports and domestic demand, central bank data showed Tuesday.

The country's real gross domestic product -- a key measure of economic growth -- increased 0.6 percent on-quarter in the July-September period, according to data from the Bank of Korea (BOK).

The third-quarter expansion compares with the 0.6 percent on-quarter expansion in the second quarter and the 0.3 percent gain in the first quarter.

On a yearly basis, South Korea's economy advanced 1.4 percent in the third quarter, following 0.9 percent growth for both the first and second quarters.

Asia's fourth-largest economy has been on a recovery pace since it contracted 0.3 percent in the fourth quarter last year.

For the full year, the central bank expects the economy to grow 1.4 percent, down from a 2.6 percent expansion in 2022 and 4.3 percent 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 recovering exports.

In particular, the chipmaking sector, one of the key pillars of the economy, appears to be on a recovery tack as a drop in prices eased, while exports and production rose for the second consecutive quarter, the bank said.

The central bank said the third-quarter expansion came as exports and domestic demand improved

The country's exports climbed 3.4 percent in the July-September period, a turnaround from the previous quarter's 0.9 percent decline.

Imports gained 2.3 percent in the third quarter from the previous quarter, following a 3.7 percent 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 percent in the third quarter, compared with a 0.1 percent decline the previous quarter.

Government spending also increased 0.2 percent in the third quarter, and construction investment increased 2.1 percent 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 countries, 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 percent 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. (Yonhap)