South Korea's Third-Quarter Economy Grows 3.4% Year-on-Year, Faster Than Expected

Deep News10-27

South Korea's economy grew faster than expected in the third quarter, as the AI boom continued to drive strong growth in semiconductor exports, offsetting weakness in other sectors.

Preliminary data released by the Bank of Korea on Tuesday showed that the country's gross domestic product (GDP) grew 1.0% from the previous quarter during July to September, after expanding 0.6% in the April-to-June period.

The data showed the economy grew 3.4% year-on-year, following a 3.7% increase in the second quarter.

Third-quarter GDP growth exceeded market expectations. The median forecast of 19 economists surveyed by media outlets was for quarter-on-quarter growth of 0.7% and year-on-year growth of 3.3%.

Exports remained a key driver of overall growth, with global investment in AI infrastructure supporting demand for semiconductors. South Korea is home to memory chip manufacturers Samsung Electronics and SK Hynix.

Facility investment, including spending on chipmaking equipment and other machinery, rose sharply from the previous quarter, while private consumption contracted.

Construction investment returned to growth in the third quarter, and the pace of government spending accelerated compared with the previous quarter.

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