South Korea's economy expanded at the fastest pace in nearly four years in the third quarter with real GDP growth of 1.3 percent. This marks 0.1 percentage point higher than the initial estimate, according to preliminary data from the Bank of Korea. Strong exports and improving private consumption drove the growth.
According to the Bank of Korea (BOK), real gross domestic product (GDP) rose 1.3 percent in the July-September period from the previous quarter. This figure is 0.1 percentage point higher than the earlier estimate of 1.2 percent and marks the fastest quarterly expansion since the fourth quarter of 2021, when growth was 1.6 percent.
The growth accelerated from 0.7 percent in the second quarter and exceeded the BOK's prior projection of 1.2 percent. On a year-on-year basis, the economy expanded 1.8 percent, a sharp pickup from 0.6 percent in the second quarter. In contrast, GDP unexpectedly contracted 0.2 percent in the first quarter, as a domestic political crisis triggered by former President Yoon Suk Yeol's martial law declaration and uncertainty from U.S. President Donald Trump's sweeping tariff measures weighed on consumer sentiment and exports.
The economy has since regained momentum, supported by government stimulus and robust export performance, particularly in the semiconductor sector. In its latest outlook released last week, the central bank raised its growth projection for this year by 0.1 percentage point to 1 percent. For 2026, it forecasts 1.8 percent expansion.
Presenting a rosier growth forecast, the BOK held its benchmark interest rate steady for the fourth consecutive meeting amid a weak currency and an unsettled housing market. This reflects the buoying effects of strong exports and improving private consumption on the recovery.