SEOUL, Oct. 27 (Xinhua) -- South Korea's economy delivered a better-than-expected performance in the third quarter, driven by a semiconductor export boom, strong facility investments and significant growth in government spending, central bank data showed Tuesday.
The seasonally adjusted real gross domestic product (GDP), adjusted for inflation, expanded 1.0 percent in the July-September quarter compared to the previous quarter, according to the Bank of Korea (BOK).
It was more than three times higher than the 0.3 percent growth forecast estimated in August by the central bank, which projected an annual growth outlook of 3.3 percent for 2026.
The quarterly growth rate rebounded sharply from negative 0.1 percent in the fourth quarter last year to 1.8 percent in the first quarter this year, before maintaining positive momentum with an increase of 0.6 percent in the second quarter and 1.0 percent in the third quarter.
Outbound shipments of the export-driven economy mounted 2.3 percent quarter-on-quarter in the third quarter thanks to strong demand for semiconductors, machinery and electrical equipment.
Soaring demand for locally-made semiconductors was led by expanding global investments in artificial intelligence (AI) infrastructure.
Imports gained 2.4 percent due to higher inflows of crude oil and semiconductor manufacturing machinery.
Facility investments jumped 4.1 percent on the back of robust demand for semiconductor manufacturing equipment, while construction investments added 0.7 percent in the third quarter after falling 0.1 percent in the previous quarter.
Investments in intellectual property products grew 2.3 percent due to increased spending on software and research and development (R&D).
Private consumption, another growth engine of the Asian economy, showed a slight setback with a decrease of 0.2 percent amid lower expenditure on both goods and services.
Fiscal spending climbed 1.9 percent, affected by higher government spending on health insurance benefits.
Amid the better-than-expected economic increase and the still high inflationary pressure, the BOK delivered a back-to-back rate hike in July and August, raising its benchmark interest rate to 3.00 percent.
By industry, the seasonally adjusted production among manufacturers swelled 2.0 percent in the third quarter on a quarterly basis, spearheaded by computers, electronic and optical devices.
Output in the service industry rose 0.2 percent, and production in the construction sector advanced 2.0 percent on an expansion in civil engineering projects.
Those in the agriculture, forestry and fishing, and the electricity, gas and water supply sectors increased 5.9 percent and 3.7 percent, respectively.
Real gross domestic income (GDI), which measures the actual purchasing power of income generated from domestic production activities, expanded 3.4 percent in the third quarter compared to the previous quarter.
From a year earlier, the real GDI surged 18.8 percent in the July-September quarter, representing the fastest growth in nearly 49 years since the fourth quarter of 1977.
It was powered by soaring global prices of locally-made semiconductors that improved the country's terms of trade. ■
