South Korea Economy Expands 1.2% in Q3

South Korea’s economy contracted by 0.3% QoQ in the three months to December 2025, reversing a 1.3% expansion in Q3 and missing expectations for a 0.1% increase. It marked the sharpest quarterly contraction in three years, driven by weakening domestic demand and a 1% decline in non semiconductor exports. Private consumption rose 0.3%, supported by higher spending on services such as healthcare, though goods consumption fell, led by motor vehicles. Government consumption increased 0.6%, mainly reflecting higher healthcare benefit outlays. Construction investment dropped 3.9%, with both building construction and civil engineering weakening, while facilities investment fell 1.8% due to lower spending on transportation equipment. Exports declined 2.1%, dragged down by motor vehicles and machinery and equipment, while imports fell 1.7% amid lower purchases of natural gas and motor vehicles. On a year on year basis, the economy expanded 1.5% in Q4, undershooting forecasts of 1.8%.

South Korea’s economy grew 1.3% QoQ in the three months to September 2025, a touch above the earlier estimate of 1.2% and the strongest pace in nearly four years, supported by firm exports and resilient private consumption. Household spending rose 1.3% as outlays increased for both goods such as motor vehicles and communication equipment and services such as restaurants and health services. Government consumption also climbed 1.3%, driven by higher spending on goods and health care benefits. Construction investment increased 0.6%, led by gains in civil engineering, while facilities investment expanded 2.6% on stronger machinery purchases including semiconductor manufacturing equipment. Exports grew 2.1% on solid semiconductor and motor vehicle shipments, and imports rose 2.0% on higher inflows of machinery, equipment and vehicles. On an annual basis, the economy expanded 1.8% in Q3, slightly above the initial estimate of 1.7%.

South Korea’s economy grew 1.2% quarter-on-quarter in the three months to September 2025, marking the fastest pace in 1-½-years on strong exports and solid private consumption. Household spending rose 1.3%, supported by higher outlays on goods such as motor vehicles and communication equipment, as well as services including dining and healthcare. Government consumption climbed 1.2%, driven by increased spending on goods and healthcare benefits. Construction investment slipped 0.1% due to weaker building activity, while facilities investment advanced 2.4% on robust demand for semiconductor equipment. Exports gained 1.5%, led by semiconductors and motor vehicles, and imports grew 1.3% on higher inflows of machinery, equipment, and vehicles. On an annual basis, South Korea’s economy expanded 1.7% in Q3, accelerating from a 0.6% growth in Q2.