Investing.com - South Korea's economy demonstrated steady growth in the third quarter, matching output from the previous quarter, thanks to a resurgence in exports.
The nation's quarterly growth was measured at 0.6% for the July-to-September period, mirroring the growth rate of the second quarter. This growth was primarily fuelled by a 3.5% increase in exports, including semiconductors and machinery, as reported by the Bank of Korea, following a 0.9% dip in the second quarter.
The observed growth rate slightly surpassed the 0.5% prediction from a Reuters survey of economists. The nation's central bank reported a similar 0.6% growth rate for the April-June period, an increase from the 0.3% growth in the preceding quarter. The Gross Domestic Product (GDP) had previously contracted by 0.4% in the final quarter of last year.
The Bank of Korea decided to maintain its base interest rate at 3.5% for the sixth consecutive meeting on October 19. The decision was influenced by the potential risk of escalating oil prices due to the conflict between Israel and the militant group Hamas, as well as the restrictive monetary policies in major countries.
The Bank of Korea also projected a 1.4% economic growth for the year, consistent with an earlier forecast made in August.
Exports of high-tech products, such as semiconductors, are crucial to South Korea's economic growth. However, recent months have witnessed a decline in information technology goods exports. Semiconductor exports fell by 14.4% in September, while system chips saw a 7.7% decrease.
Automobile exports, another vital component of the nation's economy, presented a more optimistic picture. Auto exports surged by 9.5% to reach a record value of $52.1 billion for the January-September period, as reported by the Ministry of Trade, Industry, and Energy.
The ruling People Power Party has recently emphasized the need to address economic challenges impacting everyday life, particularly inflation and high borrowing costs. Prime Minister Han Duck-soo acknowledged the internal and external conditions creating burdens on the economy and people's daily lives during a cabinet meeting.
South Korea's consumer price index rose by 3.7% in September compared to the previous year, marking the highest annual increase in five months, and an upsurge from 3.4% in August. The Prime Minister expressed concern over the impact of soaring prices and high-interest rates on consumers and small businesses, committing to seek measures to reduce food prices and create jobs.