Korea's economy grows 0.6% in Q3

This picture shows central Seoul's business cluster seen from Mount Namsan. [YONHAP]

Korea's economy grew 0.6 percent in this year's third quarter, matching an earlier estimate from the Bank of Korea (BOK) on reviving exports and domestic demand.

The country's GDP, a key measure of economic growth, increased 0.6 percent on-quarter in the July to September period, according to the BOK data on Tuesday.

In comparison, there was growth of 0.6 percent on-quarter in the second quarter and a 0.3 percent gain in the first quarter.

On a yearly basis, the economy advanced 1.4 percent in the third quarter, following 0.9 percent growth for both the first and second quarters.

Asia's fourth-largest economy has been recovering since it contracted 0.3 percent in the fourth quarter last year.

For the full year, the central bank expects the economy to grow 1.4 percent, down from a 2.6 percent growth in 2022 and 4.3 percent growth in 2021, amid restrictive monetary policies in major economies.

The BOK forecast that this year's economic growth will be in line with its estimate as private spending shows signs of a modest recovery amid recovering exports.

In particular, the semiconductor sector, one of the pillars of the Korean economy, appears to be on a recovery track as a drop in prices eased, while exports and production rose for the second consecutive quarter, the bank said.

The central bank said the third-quarter expansion came as exports and domestic demand improved.

The country's exports climbed 3.4 percent from July to September, a turnaround from the previous quarter's 0.9 percent decline.

Imports gained 2.3 percent in the third quarter from the previous quarter, following a 3.7 percent dip in the previous quarter.

The country's exports fell for the 12th consecutive month in September amid the global economic slowdown and aggressive monetary tightening by the United States and other major economies to bring inflation under control.

Private spending also rose 0.3 percent in the third quarter, compared with a 0.1 percent decline in the previous quarter.

Government spending also increased 0.2 percent in the third quarter, and construction investment increased 2.1 percent during the July to September period, the data showed.

Korea's economy has been facing uncertainty amid worries over protracted aggressive monetary tightening in major countries, including the United States, escalating geopolitical tensions, rising household debt and a slowdown in China's economy, Korea's top trading partner.

The central bank held its key interest rate steady at 3.5 percent for the seventh straight time last month as it weighs a slowdown in growth amid moderating inflation.

The rate freezes came after the central bank delivered seven consecutive rate hikes from April 2022 to January 2023.

BY KIM JU-YEON, YONHAP [kim.juyeon2@joongang.co.kr]