South Korean economy grows 3 times faster than expected in Q3

In the third quarter, South Korea's economy expanded at a rate three times higher than initially anticipated, according to data released by the Bank of Korea on Tuesday. The nation's gross domestic product (GDP) surged by 1% compared to the preceding quarter, surpassing the central bank's forecast of a mere 0.3% growth. The impressive performance was primarily fueled by a remarkable 2.3% increase in exports, largely driven by the surging demand for semiconductors, machinery, and electrical equipment.

This export boom set South Korea's current account surplus to an unprecedented US$116.6 billion in the second quarter, surpassing the combined surpluses of economic giants Germany and Japan for the first time since records began in 1996. Furthermore, investment in facilities increased by 4.1%, predominantly due to machinery utilized in semiconductor manufacturing.

Over the year, the country's economy grew by 3.4%, slightly lower than the 3.7% recorded in the previous quarter, while South Korea's real gross domestic income (GDI) surged by an astonishing 18.8% year-on-year, reflecting a rapid increase in purchasing power. The semiconductor sector's dominance has propelled South Korea's economy to record growth levels, with a current account surplus forecast to reach a record $421.9 billion in 2022, placing the country second among the 190 economies in terms of annual surplus, following China.