SEOUL, Oct 27 (Reuters) – South Korea’s economy grew faster than expected in the third quarter on booming chip exports, advance central bank estimates showed on Tuesday.
Gross domestic product expanded 1.0% in the July-September quarter from the preceding three months, when it grew 0.6%. It was stronger than a median 0.7% increase tipped in a Reuters poll of economists.
Amid the global boom in AI investment, South Korea’s exports topped $800 billion in January to September, higher than last year’s full-year record, and are on track to exceed $1 trillion this year, which will make South Korea the fourth country to reach the milestone, after the US, China and Germany.
The Bank of Korea kept interest rates unchanged last week, after back-to-back hikes in July and September, but maintained a hawkish stance by upgrading its economic growth forecasts and remaining upbeat about the country’s export momentum.
In the third quarter, exports rose 2.3% on demand for semiconductors, machinery and electric equipment, while imports grew 2.4%.
Facilities investment jumped 4.1%, led by machinery such as semiconductor manufacturing equipment. Private consumption fell 0.2%, the first decline in nearly four years.
On a year-on-year basis, GDP grew 3.4%, after rising 3.7% in the quarter before, according to the Bank of Korea, also stronger than economists’ expectations for a 3.0% increase.
(Reporting by Jihoon Lee; Editing by Nia Williams and Sonali Paul)
