South Korea's Q3 economic growth unchanged at 0.3 per cent: BOK

South Korea's economy grew at the same pace as earlier forecast in the third quarter of the year despite better-than-expected private consumption and robust exports, central bank data showed yesterday.

The country's gross domestic product adjusted for inflation grew 0.3 per cent in the July-september period, compared with three months earlier, according to the preliminary data by the Bank of Korea (BOK).

This is the same as the earlier estimate the central bank announced in late October. Annualised economic growth in the third quarter stood at 4 per cent, also unchanged from what was previously estimated.

The on-quarter growth slowed from the 0.8 per cent tallied in the second quarter.

The deceleration raised concerns that the country might not be able to achieve its annual growth target of 4 per cent for this year amid the prolonged fight against the coronavirus pandemic and global supply chain disruptions.

Last week, the BOK kept its 2021 growth outlook at 4 per cent, unchanged from its August projection, while raising its key interest rate by a quarter parentage point to tame inflation and household debt.

Consumption and investment remained weak, weighing on the pandemic-hit economy.

Private consumption declined 0.2 per cent in the third quarter compared with three months earlier, though the figure was 0.1 percentage point higher than its October estimate.

Investment in construction shrank 3.5 per cent, which was 0.5 percentage point lower than previously estimated. Facility investment also declined 2.4 per cent due in part to global supply disruptions, down 0.1 percentage point from its October estimate.

Exports remained strong, propping up the economic growth. Overseas shipments grew 1.8 per cent on-quarter in the third quarter, which was 0.3 percentage point better than previously estimated, the data showed.

The BOK said the South Korean economy can expand 4 per cent this year only if the economic growth reaches at least 1.03 per cent in the fourth quarter.

The central bank presented an upbeat outlook for private spending in the fourth quarter.

"Consumer sentiment improved in October and November, and the use of credit cards has extended their gains," Shin Seung-cheol, a senior BOK official, told a press briefing.

"There is a possibility that private spending will post robust growth in the fourth quarter," he added.

A recovery of domestic demand comes as the government relaxed virus restrictions on November 1 under the "living with COVID-19" scheme designed to gradually return to normal life.