SEOUL, October 27 (AJP) — South Korea's economy grew a stronger-than-expected 1.0 percent in the third quarter on semiconductor exports and investment, central bank data showed Tuesday while flagging signs of chip-led growth losing momentum while consumption remained stagnant.
Real gross domestic product (GDP) rose 1.0 percent from the previous quarter in the July-September period, accelerating from 0.6 percent growth in the second quarter, according to preliminary data from the Bank of Korea (BOK).
The economy grew 3.4 percent from a year earlier, easing from 3.7 percent in the April-June period.
A market consensus cited by ING had expected growth of 0.8 percent from the previous quarter and 3.2 percent from a year earlier.
The quarterly expansion was the strongest since the 1.8 percent growth recorded in the first quarter and far exceeded the BOK's August projection of 0.3 percent.
Exports rose 2.3 percent from the previous quarter, led by semiconductors and machinery and electrical equipment, accelerating from a 1.3 percent increase in the second quarter.
Facilities investment jumped 4.1 percent, driven mainly by machinery including semiconductor manufacturing equipment, while intellectual property investment increased 2.3 percent.
Government consumption rose 1.9 percent and construction investment gained 0.7 percent.
Private consumption, however, fell 0.2 percent as spending on both goods, including vehicles and home appliances, and services such as finance and food services declined, reversing a 0.4 percent gain in the previous quarter.
The divergence was also visible across industries, with manufacturing expanding 2.0 percent on gains in computers, electronic and optical products and machinery, while services grew just 0.2 percent.
The figures showed that the semiconductor boom continued to power headline growth but had yet to translate into equally strong household demand. A separate BOK survey released Tuesday showed consumer sentiment weakened in October, with expectations for both the economy and employment declining despite strong exports.
Real gross domestic income (GDI) increased 3.4 percent from the previous quarter, well above the GDP growth rate, and surged 18.8 percent from a year earlier.
The annual GDI increase was the strongest since the fourth quarter of 1977, when it rose 19.0 percent.
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