Shoppers at the shopping street in Hongdae district in Seoul, South Korea, on Saturday, July 2, 2022.
Woohae Cho | Bloomberg | Getty Images
South Korea’s economy barely grew in the third quarter, missing market expectations, as consumer spending rebounded but exports fell.
In the July-September quarter, gross domestic product expanded 0.1% from a quarter earlier on a seasonally adjusted basis, according to the Bank of Korea’s advance estimates released on Thursday.
That was just enough for Asia’s fourth-largest economy to avoid a recession, commonly defined as two consecutive quarters of contraction, after the economy contracted 0.2% in the second quarter.
The growth rate was far weaker than an increase of 0.5% tipped in a Reuters poll of economists and expected by the central bank in its quarterly forecasts provided in August.
Private consumption rose 0.5%, after falling 0.2% a quarter earlier. Construction investment dropped 2.8%, while corporate investment jumped 6.9%.
Exports, down 0.4%, fell for the first time since the final quarter of 2022, while imports rose 1.5%, bringing a net negative contribution.
South Korea’s central bank this month lowered interest rates for the first time since mid-2020 and flagged there was room for more reductions though it said the timing of any further easing would be carefully examined.
On an annual basis, the economy grew 1.5%, weaker than the previous quarter’s 2.3% and economists’ expectations of 2.0%. It was the slowest pace since the third quarter of 2023.