South Korea economy bounces back on pickup in exports

Asia’s 4th largest economy returned to quarter-on-quarter growth in the July to September period, South Korea’s central Bank of Korea (BOK) announced on Tuesday, October 27.

The South largely overcame an early coronavirus outbreak through an intensive track-and-test model, and everyday life in the country has returned largely to normal.

It is now widely expected to see one of the least bad 2020 economic performances among the Organisation for Economic Co-operation and Development group of developed economies.

Gross domestic product expanded 1.9% in the 3rd quarter over the previous 3 months, the BOK said, although the economy still shrank 1.3% on-year.

The quarter-on-quarter figure represented a significant improvement on the 3.2% contraction in April-June and was the best since the first 3 months of 2010.

It was driven by a better-than-expected exports performance as major trade partners began to emerge from the depths of the coronavirus lockdowns, officials said.

“This speaks to the resilience of a manufacturing powerhouse,” KB Securities economist Oh Jae-young told Bloomberg News. “South Korea’s manufacturing has remained unscathed from the pandemic, and now as developed economies themselves restart production, South Korea’s getting a boost.”

But Park Yang-su, head of the BOK’s economic statistics department, warned that the trade-driven economy’s recovery may suffer as a result of new waves of the pandemic in key markets.

“The rapid spread of coronavirus in Europe and the United States acts as a risk,” he said. 

Domestically, the construction sector had not rebounded as quickly as exports owing to heavy rain and severe flooding over the summer, he added. – Rappler.com