South Korea’s third-quarter growth hits lowest level in a year on weak net exports

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SEOUL — South Korea’s economic growth fell to its weakest level in a year in the third quarter despite slightly higher expectations, with weak net exports offsetting pent-up consumer and business spending, according to bank estimates. center on Thursday.

The country’s gross domestic product (GDP) grew 0.3 percent seasonally adjusted in real terms in the third quarter from the previous quarter, the Bank of Korea estimated, marking the slowest growth since the third quarter of 2021. .

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Despite managing positive growth, a breakdown of the numbers showed Asia’s fourth-largest economy was rapidly losing momentum amid slowing global demand, a wave of policy tightening around the world and high inflation .

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Net exports led to a 1.8% decline in the economy as imports grew much faster than exports, offsetting pent-up private consumption and business investment in production facilities following the removal of most barriers to COVID-19.

Economists in a Reuters poll had expected the economy to grow just 0.1% quarter on quarter over the July-September period, slowing from a 0.7% gain in April- June.

On an annual basis, the economy grew 3.1% in the third quarter after gaining 2.9% in the second quarter. The result was above expectations for growth of 2.8%.

The data came amid market speculation that the Bank of Korea may consider slowing the pace of monetary policy tightening, having already raised the key interest rate by a total of 250 basis points since August last year. ‘last year.

The BOK raised interest rates 50 basis points higher than usual earlier this month and signaled more to come, but a split vote prompted comments that the central bank may moderate the pace future of tightening. (Reporting by Jihoon Lee and Choonsik Yoo; Editing by Shri Navaratnam and Richard Pullin)