Seoul: The South Korean economy is estimated to have grown around 1 percent in the third quarter, driven by reviving consumption and strong exports, the central bank said Thursday. "Despite weak construction investment, consumption showed notable improvement in the third quarter, supported by favorable consumer sentiment amid rising stock prices and the distribution of consumption vouchers," the Bank of Korea (BOK) stated in its latest report.
According to Yonhap News Agency, exports also exceeded expectations, bolstered by robust semiconductor shipments despite U.S. tariff pressures. This has led the BOK to estimate a relatively high growth rate of around 1 percent for the quarter. The official data on the third-quarter gross domestic product (GDP) is anticipated to be released next week. Earlier, the country's real GDP had contracted by 0.2 percent in the first quarter but rebounded with a 0.7 percent growth in the second quarter.
Looking forward, the BOK predicts a slowdown in growth for the fourth quarter, attributing it to an expected deceleration in exports amid stronger impacts from the U.S.' tariff scheme. For the entire year of 2025, economic growth is estimated to align closely with the BOK's annual growth forecast of 0.9 percent. In its August forecast, the central bank projected a 0.9 percent expansion for the current year and 1.6 percent growth for 2026. A revised outlook is scheduled for release in November.
The BOK noted that the recovery is expected to continue into the next year, primarily driven by domestic demand, while projecting a slowdown in exports due to U.S. tariffs. It also highlighted that uncertainties surrounding U.S. tariff negotiations, U.S.-China trade talks, and the semiconductor cycle have heightened risks on both the upside and downside.