South Korea’s economy barely grows in third quarter, missing expectations

South Korea’s economy barely grew in the third quarter, missing market expectations, as consumer spending rebounded but exports fell.

In the July-September quarter, gross domestic product expanded 0.1% from a quarter earlier on a seasonally adjusted basis, according to the Bank of Korea’s advance estimates released on Thursday.

That was just enough for Asia’s fourth-largest economy to avoid a recession, commonly defined as two consecutive quarters of contraction, after the economy contracted 0.2% in the second quarter.

The growth rate was far weaker than an increase of 0.5% tipped in a Reuters poll of economists and expected by the central bank in its quarterly forecasts provided in August.

Private consumption rose 0.5%, after falling 0.2% a quarter earlier. Construction investment dropped 2.8%, while corporate investment jumped 6.9%.

Exports, down 0.4%, fell for the first time since the final quarter of 2022, while imports rose 1.5%, bringing a net negative contribution.

South Korea’s central bank this month lowered interest rates for the first time since mid-2020 and flagged there was room for more reductions though it said the timing of any further easing would be carefully examined.

On an annual basis, the economy grew 1.5%, weaker than the previous quarter’s 2.3% and economists’ expectations of 2.0%. It was the slowest pace since the third quarter of 2023.