South Korea’s third-quarter GDP grows at fastest pace in over a year
A container ship passes by buildings in Busan, South Korea, on Thursday, September 22, 2022. Photographer: SeongJoon Cho/Bloomberg via Getty Images
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South Korea’s economy expanded at its fastest pace in more than a year, with third-quarter gross domestic product growth beating analysts’ forecasts on Tuesday.
GDP rose 1.7% annually, according to preliminary estimates from the Bank of Korea, compared to the 1.5% expected by economists polled by Reuters. The economy grew by 0.6 percent in the second quarter.
Data from Bank of Korea It found that growth was mostly supported by exports and the manufacturing sector, which grew by 6% and 3.3% annually respectively.
The construction sector was the biggest drag on the economy, contracting 8.1% in the reported quarter compared to the previous year.
Growth in exports of goods and services recorded the fastest growth since the third quarter of 2024.
On a quarterly basis, the country’s GDP rose 1.2%, beating a Reuters poll’s forecast for growth of 0.9%.
South Korea’s GDP data comes as the country’s negotiators continue to bicker over details of a trade deal with the Trump administration. In an interview with Bloomberg last Friday, South Korean President Lee Jae Myung said the two countries were deadlocked on key details regarding Seoul’s $350 billion investment promise.
“The United States will of course try to maximize its interests, but not to the extent that it would have disastrous consequences for South Korea,” Lee said in the interview.
In July, South Korea reached a trade deal with Trump that imposed a 15 percent blanket tariff on the country’s exports to the United States; This was lower than the 25 percent Trump had previously announced. In return, Seoul promised to invest $350 billion in the United States.
Lee will meet Trump on the sidelines of the Asia-Pacific Economic Cooperation summit in Gyeongju, South Korea, later this week.
The economy continues to improve, supported by a sustainable recovery in consumption and positive export growth, the Bank of Korea said last Thursday.
“Looking forward, domestic demand is expected to continue recovering, led by consumption, and exports are expected to remain advantageous for some time thanks to the strong semiconductor sector, but the effects of US tariffs on exports are likely to increase gradually.” BOK added.
The central bank estimates that full-year growth will be 0.9 percent for 2025 and 1.6 percent for 2026.
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