Key facts
- Third-quarter GDP growth forecast at 0.7%, up from 0.6% in Q2.
- Year-on-year GDP growth forecast at 3.0%, slowing from 3.7%.
- Chip exports accounted for nearly half of total shipments in September.
- Bank of Korea held its benchmark interest rate at 3.00%.
South Korea's economy is projected to have grown slightly faster in the third quarter compared to the previous one, primarily driven by robust semiconductor exports and AI-related investments. However, domestic demand remains subdued due to high borrowing costs and significant household debt. Exports reached a record $120.9 billion in September, with chip exports alone surging by 262.8% to $60.3 billion, highlighting their crucial role in the nation's GDP. Economists polled by Reuters forecast a 0.7% quarterly growth, a marginal increase from the 0.6% recorded in the second quarter. On a year-on-year basis, GDP is expected to grow 3.0%, a slowdown from the previous quarter's 3.7%. The Bank of Korea maintained its benchmark interest rate at 3.00% and revised its growth forecast for the year to 3.3%.