The South Korean economy grew at the fastest rate in over five years in the third quarter, helped by a strong recovery in consumer spending and a boom in the construction industry, central bank data showed Thursday.
The country’s gross domestic product expanded 1.3 percent from three months earlier in the July-September period, according to the preliminary data from the Bank of Korea.
The Q3 growth marks a slight increase from an earlier estimate of 1.2 percent growth offered in October.
The 1.3 percent on-quarter growth is the highest reading since the 1.7 percent growth tallied in the second quarter of 2010. It also marked the first time in five quarters the country’s economic growth exceeded the 1 percent mark, according to the central bank.
From a year earlier, the local economy grew 2.7 percent.
The data showed the service sector got an apparent boost from growing consumption, which had taken a hit from the Middle East Respiratory Syndrome outbreak in late May.
Household spending dipped to a record low in the April-June period as people avoided public venues out of fear of catching the disease that has so far claimed 38 lives here. The government is expected to declare an end to the outbreak later in the month.
In the July-September period, output by the country’s service industry expanded 1 percent from three months earlier, also marking
2.6 percent growth from the same period last year, according to the BOK.
GDP generated by the construction industry rose 5.6 percent on-quarter in the three months ended Sept. 30.
Such a growth was apparently driven by a recent surge in demand for homes prompted by record low interest rates. The central bank has kept its key interest rate at a record low of 1.5 percent since June.
In the three months ended Sept. 30, home transactions spiked 21 percent on-year to over 290,000 with the number of construction permits issued for new homes also jumping 21 percent over the cited period, according to earlier reports.
GDP from the manufacturing industry, on the other hand, only inched up 0.1 percent from three months earlier, partly reflecting a prolonged downturn in the country’s exports, a key driving engine for Asia’s fourth-largest economy.
South Korea’s exports have fallen every single year since the start of 2015, due largely to slowing economic growth of China, the world’s single largest importer of South Korean goods.
The central bank, meanwhile, said the country’s gross national income gained 1.4 percent from three months earlier in the third quarter.
The central bank earlier forecast the country’s GDP to grow 2.7 percent on-year in 2015.
A BOK official said the target can be attained through a 0.8 percent on-quarter growth in the fourth quarter. (Yonhap)