South Korea: growth reaches 3.4% driven by semiconductors
Semiconductor exports more than tripled in the third quarter year-on-year. The annual current account surplus could reach $421.9 billion this year, the second largest behind China.
South Korea recorded much faster-than-expected growth in the third quarter driven by demand for semiconductors, essential for artificial intelligence, according to figures released Tuesday by the central bank. The gross domestic product of Asia's fourth-largest economy grew 1% between July and September, compared to the previous three months, compared to a forecast by the Bank of Korea of just 0.3%, according to these preliminary data. Compared to the same period a year earlier, growth stood at 3.4%, slightly lower than the 3.7% recorded in the second quarter.
Activity was supported by a 2.3% increase in exports compared to the second quarter, driven by semiconductors, machinery and electrical equipment. Exports of semiconductors, a very powerful sector in South Korea, more than tripled in the third quarter year-on-year to reach $148 billion, according to government figures. Real gross domestic income (GDI), a measure of purchasing power, jumped 18.8% year-on-year, its fastest rise in almost 49 years, driven by rising semiconductor prices.
The South Korean economy recorded its fastest growth in more than five years in the January-March period, growing 1.7% compared to the previous three months thanks, again, to booming demand for semiconductors. » READ ALSO - $290,000 bonus per year: from Samsung to Meta via OpenAI, the incredible bonuses for tech employees Dependence on semiconductors These data confirm “the optimistic assessment of the BOK (...
) that strong demand for chips is keeping exports and investment high,” said Kwon Hyo-sung of Bloomberg Economics. “The risk is that growth remains heavily concentrated in the semiconductor sector, which would leave South Korea exposed to a slowdown in global AI spending,” warned John Bromhead, economist at Moody's Analytics. The semiconductor boom also pushed South Korea's current account surplus to a record $116.6 billion in the second quarter, surpassing the combined surpluses of Germany and Japan for the first time.
The International Monetary Fund (IMF) projects that South Korea's annual current account surplus will reach $421.9 billion this year, the second largest among 190 economies, behind China. Semiconductor exports jumped 218.7% year-on-year to $148 billion in the third quarter, according to government data.
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- Le Figaro27 Oct, 07:00South Korea: growth reaches 3.4% driven by semiconductors ↗Figures: 421.9 milliards
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