S. Korean economy grows by 1.9% in third quarter

The South Korean economy has recorded positive growth for the first time since COVID 19. The government said the recovery is in full swing whereas the central bank said it is not a V-shaped recovery.

According to the Bank of Korea (BOK), the real GDP of South Korea increased by 1.9 percent to 456.86 trillion won in the third quarter compared to the previous quarter according to the Bank of Korea on Tuesday. It is the first positive growth of the year and the biggest quarterly growth since the first quarter in 2010 (2.0%).

The rebound is largely attributable to an increase in export. After a 16.1 percent decrease in the second quarter, the export figures jumped by 15.6 percent in the third quarter with growing demand for cars and semiconductors. Export’s net contribution to the economic growth that subtracts import was 3.7 percent, up from ―4.1% in the second quarter.

The central bank and the government, however, seem to have different views. “The South Korean economy is now on the path to full recovery,” said Hong Nam-ki, deputy prime minister and minister of Economy and Finance, emphasizing the fact that it is the largest growth in 10 years.

The Bank of Korea, on the other hand, said that it cannot be seen as a V-shaped recovery, pointing out the fact that the GDP growth rate was lowest in the second quarter. “The recent GDP trends suggest that we are not yet where we were in the fourth quarter of 2019 and still below the previous trend line,” said Park Yang-su, head of the BOK’s economic statistics department. “It is difficult to call it a V-shaped recovery.”


Hee-Chang Park ramblas@donga.com · Choong-Hyun Song balgun@donga.com