South Korea's Economy Shows Modest Growth in Q3

The South Korean economy grew by 0.1% in the third quarter of this year, according to preliminary estimates released by the Bank of Korea on December 5. This figure aligns with the previously announced advance estimate, reflecting a modest economic expansion amidst various sectoral challenges.

By sector, exports decreased by 0.2%, primarily driven by declines in the automobile and chemical products sectors. Imports, on the other hand, rose by 1.6% due to increased demand for machinery and equipment.

Kang Chang-goo, director general of the Economic Statistics Department at the Bank of Korea, explained, "Automobile exports decreased in the third quarter due to the impact of strikes, and the chemical sector was affected by weak demand from China." He added, "Exports are also showing signs of slowing down in the fourth quarter."

Construction investment in the third quarter plummeted by 3.6%, mainly in building construction. Conversely, facility investment saw a significant increase of 6.5%, led by the semiconductor and aviation sectors. Private consumption, which had been a concern, rose by 0.5% as both goods and services consumption increased. Government consumption also increased by 0.6%, mainly due to health insurance benefits.

To achieve the initially expected growth rate of 2.2% for this year, the Bank of Korea calculates that a growth rate of 0.5% must be achieved in the fourth quarter. Addressing concerns that the recent state of emergency might negatively impact the growth rate, Kang stated, "We are aware of the heightened concerns about economic uncertainty," but added, "As the state of emergency was lifted relatively quickly, its impact on the market is seen as limited."