South Korea's economy grew 1.0% in the third quarter of 2026, beating forecasts on semiconductor exports and facility investment, while private consumption fell for the first time in nearly four years.
South Korea's economy grew 1.0% in the July-to-September quarter, faster than expected, on booming semiconductor exports and a jump in facility investment, according to advance estimates from the Bank of Korea released on October 27.
Gross domestic product rose 1.0% from the previous quarter, up from 0.6% in the second quarter and above the 0.7% median increase tipped in a Reuters poll of economists. On a year-on-year basis, the economy grew 3.4%, also stronger than the 3.0% economists had expected. Exports rose 2.3% on demand for semiconductors, machinery and electrical equipment, while facility investment jumped 4.1%, led by machinery such as semiconductor manufacturing equipment.
The strength sits alongside a weak spot at home. Private consumption fell 0.2%, the first decline in nearly four years, as spending on goods such as cars and electronics and on services including finance and food slipped. Government consumption rose 1.9%, construction investment grew 0.7%, and manufacturing output increased 2.0%. Exports topped 800 billion dollars in January to September, already above last year's full-year record, putting South Korea on track to exceed 1 trillion dollars in exports this year.
The Bank of Korea's advance estimate is the source of the headline figures, and the quarterly components line up across independent reporting of the same briefing. Aju Press, reporting the central bank's briefing, gives the same 1.0% quarterly growth, the same 2.3% rise in exports and the same 4.1% rise in facility investment, and quotes Bank of Korea official Lee Dong-won saying the result beat the bank's August forecast of 0.3% by 0.7 percentage points. These are advance estimates, so the figures can still be revised when fuller data arrive.
The result raises the arithmetic for the full year. Lee said cumulative growth for the first three quarters stands at 3.6%, and that even zero growth in the fourth quarter would leave annual growth at 3.6%, while fourth-quarter growth of 1.4% or more would make 4% possible. The Bank of Korea is due to update its forecasts next month, after holding interest rates last week following hikes in July and September. The outlook is not one-sided: the central bank has separately modelled a pessimistic case in which a slowdown in artificial-intelligence spending by major United States technology firms cuts Korean semiconductor exports by 50 billion to 100 billion dollars against earlier forecasts.