South Korea’s economy expanded 1.3% in the third quarter from the previous three months, the Bank of Korea said Wednesday, marking the strongest quarterly performance since late 2021.
The preliminary reading was revised up from an advance estimate of 1.2% released in October, with stronger-than-expected construction investment and semiconductor facility spending contributing to the improvement. On an annual basis, gross domestic product rose 1.8%, accelerating sharply from 0.6% growth in the second quarter.
The data caps a remarkable turnaround for Asia’s fourth-largest economy, which contracted 0.2% in the first quarter following political turmoil triggered by former President Yoon Suk Yeol’s martial law declaration last December. Government stimulus measures, including consumption vouchers, helped revive household spending, which climbed 1.3% — the fastest pace since the third quarter of 2022.
Construction investment, initially estimated to have declined 0.1%, was revised to a 0.6% gain as civil engineering projects picked up. Exports also provided support, rising 2.1% on robust semiconductor and automobile shipments.
The central bank has raised its full-year growth forecast to 1% from 0.9%, though officials cautioned that fourth-quarter expansion may slow due to base effects and potential headwinds from U.S. tariff policies. Exchange rate volatility remains a concern as policymakers weigh its mixed impact on consumer prices and export competitiveness.
