South Korea’s Economy Grows 1.0% in Third Quarter, Beating Analyst Forecasts
Key Facts
South Korea’s gross domestic product grew 1.0% quarter on quarter in the third quarter of 2026, exceeding the Reuters poll average forecast of 0.7%, according to a Reuters report published via Investing.com. The reading came as Japanese and Korean shares rose during trading, according to a market source, which did not confirm levels or percentages for the gains. On Wall Street, the Nasdaq Composite rose 0.8% in the October 26 session, and the S&P 500 gained 0.7%, according to the Associated Press. The agency noted continued volatility in AI stocks, in a context preceding Asian trading. South Korea’s strong growth puts semiconductor exports and investment in manufacturing equipment at the forefront of quarterly performance components.
Korean exports rose 2.3% in the third quarter from the previous quarter, supported by demand for semiconductors, machinery and electrical equipment, according to the Reuters report. This reflects contributions from several categories of goods to trade growth, not just the chip sector. Facility investment also jumped 4.1% during the same period, led by semiconductor manufacturing equipment. The report said investment included machinery such as chip production equipment. Exports growth thus coincided with expanded spending on productive capacity, while overall economic growth exceeded quarterly expectations.
By contrast, private consumption fell 0.2% in the third quarter from the previous quarter, marking its first decline in nearly four years, according to Reuters. The reading reveals a divergence among components of the economy: stronger exports and investment alongside weakness in household spending. The decline came in the same quarter that GDP recorded quarterly growth of 1.0%. The drop stood out even as the overall reading exceeded the average forecast of 0.7%. The fall in private consumption is a parallel development to the external and investment sources of growth cited in the report.
The October 26 Wall Street session provides nearby context for Asian market moves, with the Nasdaq Composite up 0.8% and the S&P 500 gaining 0.7%, according to the Associated Press. The agency linked the picture to continued volatility in AI stocks, without attributing the performance of Japanese and Korean shares to a specific cause. A market source had reported that shares in both countries rose during trading, but provided no index levels or gain percentages in the available material. Asian gains therefore remain a description of the trading move reported by that source. The available facts include no confirmed figures for Japan’s or South Korea’s performance in the same session.
Against the backdrop of Japanese monetary policy, the interest rate applied to the Bank of Japan’s complementary deposit facility has been 1.25% since September 24, 2026, while the bank’s guidance for the uncollateralized overnight rate is around 1.25%. The bank announced that its next monetary policy meeting will be held on October 29 and 30, 2026. The timing places the meeting as investors’ next milestone after South Korea’s growth data and Asian market trading. The available facts do not specify the meeting’s outcome or any potential change in the interest rate. The expected decision remains subject to the bank’s deliberations during the announced two-day meeting.