South Korea's economy grew faster than expected in the third quarter as a global AI chip boom boosted exports and investments, advance Bank of Korea estimates showed on Tuesday, Reuters reported. Gross domestic product expanded 1.0% in July-September from the preceding three months, when it grew 0.6% — stronger than a median 0.7% increase in a Reuters poll and well above the Bank of Korea's August forecast of 0.3%. Year-on-year growth was 3.4%, according to second reporting of the same release.
Source: Reuters, reporting Bank of Korea
"It is estimated that about half of economic growth is being driven by semiconductors," Lee Dong-won, director general of the Bank of Korea's economic statistics department, told a briefing, Reuters reported. Exports rose 2.3% in the quarter and facilities investment jumped 4.1%, led by semiconductor manufacturing equipment, according to reporting summarising the central bank data.
Source: InvestingLive, summarising Bank of Korea data
Exports on track for a $1 trillion year
Amid the global AI investment boom, South Korea's exports topped $800 billion in January-September, already higher than last year's full-year record, and are on track to exceed $1 trillion this year — which would make South Korea only the fourth country to reach that milestone, after the United States, China and Germany, Reuters reported. Yaani: $800 billion is 80,000 crore dollars, and $1 trillion is 1 lakh crore dollars.
The weak spot was at home. Private consumption fell 0.2% in the quarter — its first decline in nearly four years — hit by weaker car spending amid auto strikes and a stock-market slump, second reporting said. The Bank of Korea's Lee said consumption will likely recover gradually as dividend payouts by chip firms in the fourth quarter and employee bonuses in early 2027 boost household income, and that if fourth-quarter output simply holds at third-quarter levels, annual growth would come in at about 3.7%, Reuters reported.