ع
The Bank of Korea’s preliminary data showed real gross domestic product rising 1 percent quarter-on-quarter in the July-September period, accelerating from 0.6 percent growth in the preceding quarter and exceeding the central bank’s August forecast of 0.3 percent. On a year-on-year basis, the economy expanded 3.4 percent after 3.7 percent growth in the second quarter, according to a Yonhap News Agency dispatch. The outperformance was driven primarily by semiconductor exports amid booming artificial intelligence investment worldwide, with manufacturing output advancing 2 percent, a Reuters analysis found.
Exports climbed 2.3 percent from the previous quarter while imports increased 2.4 percent, the Bank of Korea figures show, resulting in net exports contributing 0.1 percentage point to overall growth. Facility investment jumped 4.1 percent, led by spending on machinery including semiconductor production equipment, and construction investment gained 0.7 percent as civil engineering projects picked up. Government spending also advanced 1.9 percent during the period, according to the central bank’s breakdown.
Private consumption contracted 0.2 percent, marking the first decline in nearly four years as households cut back on both goods and services, Bank of Korea data indicated. This weakness contrasted with the strength in external demand and business investment, highlighting uneven momentum across the economy. The central bank has nonetheless raised its full-year growth projection to 1 percent for 2025 and 1.8 percent for 2026 in recent updates.
The stronger third-quarter performance is expected to lift the annual growth rate by about 0.35 percentage point, potentially pushing cumulative expansion into the high 3 percent range if momentum holds, Bank of Korea economic statistics head Lee Dong-won stated. “The portion exceeding the Q3 forecast could act as a factor raising the annual growth rate by 0.35 percentage points,” he said. Cumulative growth for the first three quarters reached 3.6 percent from a year earlier, according to the department’s assessment.
Semiconductors accounted for roughly half of the year-on-year expansion, with computers, electronic and optical equipment contributing around 60 percent overall, Lee told reporters. The sector has benefited from sustained global AI demand that has propelled South Korean exports beyond $800 billion in the first nine months of the year. Real gross domestic income, which adjusts for terms of trade, surged 18.8 percent on-year, its strongest increase since the fourth quarter of 1977, the Bank of Korea reported.
The central bank kept interest rates steady last week following hikes in July and September while maintaining a positive outlook on export prospects, a Reuters report noted. This latest GDP reading adds to a series of upward surprises in 2026, with first-quarter growth at 1.8 percent before a moderation in the second quarter. Economists polled ahead of the release had anticipated a 0.7 percent quarterly gain, according to the news agency.
