South Korea's third-quarter growth beats forecasts on booming chip exports

what happened

South Korea's economy grew 1.0% in July-September from the previous quarter, according to preliminary Bank of Korea data. That beat the 0.7% median forecast in a Reuters poll of economists and accelerated from 0.6% growth in the second quarter. Year on year, GDP rose 3.4%, against 3.7% previously and expectations of about 3.0%.

Exports of semiconductors, machinery and electrical equipment drove the gain as global investment in AI infrastructure surged. Exports topped $800 billion in January to September and are on track to pass $1 trillion this year. Facilities investment rose 4.1%, led by chipmaking equipment, while private consumption fell 0.2%, its first decline in nearly four years.

The Bank of Korea left rates unchanged last week after hikes in July and September, while raising its growth outlook and keeping a hawkish tone.

why it matters

Strong data reinforce expectations that the Bank of Korea may keep tightening if growth and inflation stay above target. For markets, this supports the won and chip-sector shares, while weak consumer spending points to an uneven recovery.

market impact

Won and chipmakers: strong exports support the economy and bolster expectations of further BoK tightening

tags

instruments