South Korea's Q3 GDP Expands 1% on Chip Exports, Beats BOK Forecast
The Bank of Korea reported stronger-than-expected growth, with facilities investment and intellectual property also rising, making a $40,000 per capita GNI likely.
Stronger-Than-Expected Q3 Growth
South Korea's economy expanded by 1% in the third quarter, the Bank of Korea (BOK) announced, significantly surpassing its own 0.3% projection for the period. This marks a continuation of stronger-than-anticipated performance, following 1.8% growth in the first quarter and 0.6% in the second.
The central bank's August forecast for annual growth stood at 3.3%, which it is scheduled to revise in November, indicating potential for an upward adjustment.
Semiconductor-Driven Expansion
Booming semiconductor exports were a primary driver of the third-quarter expansion. Overall exports increased by 2.3%, largely due to strong demand for semiconductors and electrical equipment.
Lee Dong-won, director general of the BOK's economic statistics department, noted that computers and electronic equipment, including semiconductors, accounted for approximately 60% of the year-on-year GDP growth. Semiconductors alone contributed about half of this growth.
Investment and Broader Sector Gains
Domestic investment also contributed, with facilities investment rising 4.1%, primarily in machinery, including semiconductor manufacturing equipment. Investment in intellectual property products grew 2.3%, reflecting increased spending on research and development and software.
By industry, manufacturing grew 2%, led by computers and electronic equipment, while agriculture, forestry, and fisheries rose 5.9%. Services edged up 0.2%. Imports increased 2.4%, driven by crude oil and semiconductor manufacturing equipment.
The Ministry of Finance and Economy stated that the latest GDP data makes achieving a per capita Gross National Income (GNI) of $40,000 this year almost certain. This increase is attributed to the Korean won's appreciation against the US dollar and an upward revision to the GDP growth outlook.
Lee Dong-won added that annual growth could reach 4% if the economy expands by at least 1.4% in the fourth quarter. This potential milestone, 12 years after Korea's per capita GNI first surpassed $30,000 in 2014, signals continued economic momentum for investors watching the region.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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