SEOUL, Oct. 27 (Yonhap) — South Korea’s economy returned to modest growth in the third quarter, marking the first quarterly expansion since the coronavirus pandemic began, as exports showed signs of improvement, the Bank of Korea (BOK) said Tuesday.
In the July-September period, the nation’s real gross domestic product (GDP) grew 1.9 percent from the previous quarter, when it shrank 3.2 percent, according to the BOK data.
The third-quarter reading marked the fastest expansion since the first quarter of 2010.
Compared with a year ago, however, the economy, Asia’s fourth largest, contracted 1.3 percent, the BOK said.
In August, the BOK expected South Korea’s economy to contract 1.3 percent this year.
If the nation meets the target, the economy should grow around 1.5 percent in the third and fourth quarters.
Park Yang-su, head of the BOK’s economic statistics department, told a media briefing that the nation could meet this year’s growth target, as the third-quarter results were better than expected.
Also, the economy could contract less than predicted this year if it expands by at least 0.4 percent in the fourth quarter, Park said.
However, the pace of recovery may be moderate for the trade-driven economy because new waves of coronavirus infections recently gripped the United States and European nations, Park said.
“Given the risk factors, annual growth rates are still in the range of previous projections,” Park said.
Shortly after the data was released, Finance Minister Hong Nam-ki said the nation’s economy is on the road to recovery, helped by robust growth in exports.
“The economy entered a recovery path for normalization of the economy,” Hong told a policy meeting.
The economy is also expected to report an expansion in the fourth quarter, as advanced nations eased restrictions against the pandemic, Hong said.
Hong said the government will take measures to boost local consumption in the fourth quarter.
During the third quarter, exports grew by 15.6 percent, as overseas shipments of automobiles and semiconductors expanded, the BOK said.
Although the pandemic-caused trade slump eased as advanced nations lifted lockdown measures, domestic spending was still weak because of a resurgence of the new coronavirus in mid-August.
Last month, South Korea saw exports rebound for the first time in seven months as major trade partners gradually resumed their business activities amid the pandemic.
Outbound shipments came to $48 billion last month, up 7.7 percent from $44.6 billion posted a year earlier.
Facility investment rose 6.7 percent on-quarter in the third quarter, the BOK said.
Private spending edged down 0.1 percent in the quarter, while government spending inched up 0.1 percent.
The government has so far boosted its budget spending by at least 67 trillion won (US$59.3 billion) with four batches of supplementary budgets to boost the virus-hit economy.
By sector, output by the manufacturing industry gained 7.6 percent on-quarter in the third quarter, a turnaround from a 8.9 percent plunge in the second quarter.
Output by the construction sector dipped 5.5 percent in the third quarter, while that of the service sector grew 0.7 percent.