South Korea's third-quarter GDP rose 1.0 per cent, exceeding forecasts, driven by increased exports and investments linked to the global AI chip boom, though domestic demand remained weak.
South Korea's economy expanded 1.0 per cent in the July-September quarter, outpacing the 0.7 per cent median forecast and the Bank of Korea's earlier projection of 0.3 per cent. This growth follows a 0.6 per cent increase in the previous quarter. The Bank of Korea attributes about half of the growth to the semiconductor industry.
Exports and investments are expected to remain strong in the fourth quarter, with chip production set to increase further next year. However, private consumption fell for the first time in nearly four years, declining 0.2 per cent due to a stock market slump and car purchase declines from strikes at major automakers. Exports reached US$800 billion in the first nine months of 2026, on track to exceed US$1 trillion this year.
Why it matters
South Korea's semiconductor industry is a key driver of economic growth, directly impacting the nation's export performance and global trade standing.
This section reflects Dumpling editorial interpretation and is provided for context only.
What to watch
The Bank of Korea's next interest rate decision and the trajectory of private consumption in the fourth quarter will be critical indicators of economic health.
This section reflects Dumpling editorial interpretation and is provided for context only.