S. Korea's economy grows faster than estimated at 2.1% in Q3: BOK

This file photo, taken June 4, shows stacks of import-export cargo containers at South Korea's largest seaport in Busan, 450 kilometers southeast of Seoul. (Yonhap)

South Korea's economy expanded at a faster-than-estimated pace in the third quarter on the back of a modest recovery in exports amid the coronavirus pandemic, central bank data showed Tuesday.

The country's real gross domestic product (GDP) grew 2.1 percent in the July-September period from the previous quarter, according to the data from the Bank of Korea (BOK).

The reading marks a slight increase from an earlier estimate of a 1.9 percent on-quarter expansion estimated in October and compares with a 3.2 percent contraction in the second quarter, the data showed.

It also marks the fastest expansion in 11 years and the first positive growth in three quarters.

Exports jumped 16 percent on-quarter in the third quarter, helped by rising global demand for semiconductors and automobiles, the BOK said.

Facility investment rose 8.1 percent on-quarter in the third quarter, led by the growth of investment in transportation equipment and machinery.

Government consumption edged up 0.2 percent, while construction investment fell 7.3 percent, the BOK said.

Weaker consumer spending, which stayed flat in the third quarter, was the biggest drag on the momentum of an economic recovery, according to the data.

From a year earlier, the nation's economy shrank 1.1 percent in the third quarter, compared with a 2.7 percent on-year contraction in the previous quarter.

Last week, the BOK held its policy rate unchanged at a record low of 0.5 percent, while slightly revising up this year's economic outlook.

Driven by signs of a gradual recovery in exports, the BOK revised up this year's economic growth outlook to a 1.1 percent contraction, compared with a previous forecast of a 1.3 percent retreat.

Park Sung-bin, a BOK official, told reporters that the central bank raised the third-quarter growth rate because industrial output in September was better than expected.

South Korea could meet this year's growth target if the economy expands at a pace of 0.4 percent to 0.8 percent in the fourth quarter, Park said.

However, a recent wave of coronavirus infections is expected to have a negative impact on private consumption, Park said. (Yonhap)