Financial News: South Korea GDP Growth Fastest In 1 1/2

South Korea GDP Growth Fastest In 1 1/2 Years

(RTTNews) - South Korea's economy logged its fastest growth in one-and-a-half years in the third quarter, thanks to robust consumption and exports.

Gross domestic product grew 1.2 percent from a quarter ago, advance estimate from the Bank of Korea showed on Tuesday. This followed second quarter's 0.7 percent expansion. Moreover, a similar pace of growth was last reported in the first quarter of 2024.

On the expenditure side, private consumption advanced 1.3 percent, as expenditures on goods especially motor vehicles and communication equipment, and services increased notably.

Driven by spending on goods and on health care benefits, government spending rose 1.2 percent.

Gross fixed capital formation rebounded 0.8 percent after falling 1.0 percent a quarter ago. Investments in facilities and intellectual property products increased, while construction investment edged down.

Exports rose 1.5 percent as shipments of semiconductors and motor vehicles increased. At the same time, imports gained 1.3 percent on higher demand for machinery and equipments and motor vehicles. On a yearly basis, GDP growth accelerated to 1.7 percent from 0.6 percent in the second quarter.

ING economist Min Joo Kang said domestic demand boosted by cash handouts and strong asset markets underpinned economic growth in the third quarter but a slowdown is expected in the fourth quarter as government support wanes and tariff headwinds challenge exports growth going forward.

The economist expects GDP growth to ease to 0.6 percent in the fourth quarter but annual growth for 2025 was seen at 1.2 percent, unchanged from the prior outlook.

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