Shoppers at a shopping street in Hongdae District, Seoul, South Korea, Saturday, July 2, 2022.
Yuhai Cao | Bloomberg | Getty Images
South Korea’s economy barely grew in the third quarter, below market expectations, with consumer spending rebounding but exports falling.
According to estimates released by the Bank of Korea on Thursday, gross domestic product increased by 0.1% in the July-September quarter from the previous quarter on a seasonally adjusted basis.
That was enough for Asia’s fourth-largest economy to avoid a recession, usually defined as two consecutive quarters of contraction, with the economy contracting 0.2% in the second quarter.
The growth rate was well below the 0.5% rate forecast in a Reuters poll of economists and expected in the central bank’s quarterly forecast provided in August.
Private consumption grew 0.5% after falling 0.2% in the first quarter. Construction investment fell by 2.8%, and business investment increased by 6.9%.
Exports fell by 0.4%, the first decline since the fourth quarter of 2022, while imports grew by 1.5%, bringing a net negative contribution.
The Bank of Korea cut interest rates this month for the first time since mid-2020 and said there was room for further cuts, but said it would carefully review the timing of further easing.
On an annual basis, the economy grew by 1.5%, down from 2.3% in the previous quarter and economists’ expectations of 2.0%. This is the slowest growth rate since the third quarter of 2023.
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