South Korea's Economy Grows 1% in Third Quarter as Semiconductor Exports Lift Output

South Korea's economy expanded 1.0% in the third quarter of 2026 from the preceding three months, according to advance figures released Tuesday by the Bank of Korea, as semiconductor exports and investment in production equipment supported growth.

The July–September increase accelerated from 0.6% in the second quarter and exceeded the central bank's earlier 0.3% projection. Output was 3.4% higher than a year earlier, compared with 3.7% annual growth in the preceding quarter. These are preliminary estimates and may be revised as additional data become available.

Exports increased 2.3% quarter on quarter, led by semiconductors, machinery and electrical equipment. Imports rose 2.4%. Investment in facilities climbed 4.1%, reflecting spending on machinery that includes equipment used to manufacture chips. Construction investment increased 0.7%, while government consumption rose 1.9%.

The export-led expansion did not extend to every part of the domestic economy. Private consumption fell 0.2% from the previous quarter, showing that household spending remained weak despite the stronger overall growth figure.

Demand for semiconductors used in artificial-intelligence infrastructure has helped sustain South Korea's exports and manufacturing investment. The figures offer a fresh indication of the economy's reliance on external technology demand, while the decline in private spending highlights an uneven recovery.

The Bank of Korea had projected 3.3% economic growth for 2026 in its August outlook. The new quarterly figures could influence its next forecast, but no revised full-year projection was announced with the advance GDP estimate. The distinction matters: quarterly GDP growth, annual GDP growth and a forecast for the full calendar year measure different things.