South Korean economy grew 1.4 percent in the third quarter, the fastest pace in nearly seven years, as it showed improvements across the board with feeble domestic demand on top of robust exports of mainstay items helped by supplementary spending and government measures to boost income.

According to the preliminary data released by the Bank of Korea (BOK) on Thursday, the country’s gross domestic product (GDP) totaled 392.1 trillion won ($348.4 billion) in the July to September period, up 1.4 percent on quarter in the biggest quarterly growth since 1.7 percent of the second quarter in 2010. Against the same period last year, the economy expanded by 3.6 percent.

The BOK last week indicated stronger-than-expected numbers by upping its outlook for annualized growth to 3.0 percent. Still the market expected the growth pace would not exceed 1.0 percent. It now anticipates the economy to finish the year at 3.1 percent to 3.2 percent, performing its best since 3.3 percent in 2014.

The main Kospi bourse closed Thursday down 0.48 percent at 2,480.63 from a fresh historic high in the previous session. The won was up 0.29 percent at 1,124.60 won against the U.S. dollar.

Bigger-than-expected investment helped domestic economy.

Construction investment rose 1.5 percent on quarter on government spending and facility investment up 0.5 percent due to expansion in technology sector.

The external front remained favorable. Exports gained 6.1 percent on strong demand for semiconductors, chemicals, and automobile. Imports rose 4.5 percent on quarter.

The manufacturing output expanded by 2.7 percent, the biggest growth since the second quarter in 2010. Services sector output also increased by 0.9 percent, or the fastest pace in two years.

Private consumption grew 0.7 percent on quarter thanks to increased spending on non-durable goods like medical service, utilities, and liquors. Government spending expanded 2.3 percent on quarter with a jump in general and health care expenses.

Gross domestic income also grew 1.6 percent on quarter to 409.8 trillion won.

By Yoon Won-sub, Boo Jang-won and Cho Jeehyun

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]