South Korea’s advanced Q3 GDP report has just been released, and it’s beaten to the topside.
According to the Bank of Korea (BOK), the economy grew by 1.2% over the September quarter, higher than the 1.0% expected, leaving the annual growth rate at 2.6%.
The quarterly growth rate was the fastest since the March quarter 2011, and left the annual rate of growth at levels not seen since the December quarter 2014.
By sector, construction and services grew by 5.3% and 1.0% respectively following flat growth in Q2 while manufacturing eked out a gain of 0.1%, having expanded by 1.2% in the three months to June. Agriculture, recovering from a crippling drought earlier in the year, rebounded by 6.5% following a 12.2% contraction previously.
On an expenditure basis, private consumption jumped by 1.1% following a 0.2% contraction in the June quarter. Government consumption grew by 1.9% following a 0.8% increase. Capital and construction investment grew by 2.0% and 4.5% respectively.
Looking further ahead, the BOK forecasts that the economy is likely to expand by a further 1% during the current quarter.
South Korea is Asia’s fourth-largest economy and currently ranks just outside the world’s top 10 in terms of total economic output.
The strong quarterly GDP report comes at a welcome time for the South Korean economy. Having endured a severe drought, outbreak of the deadly MERS virus and a regional slowdown led by China earlier in the year, the once high-flying economy has struggled to gain traction in recent months, despite a swathe of rate cuts that took the nation’s key interest rate to just 1.50%, the lowest level on record.