South Korea’s economy expanded 2.6 percent in the July-September quarter from a year earlier, the fastest annual clip in three quarters, the Bank of Korea (BOK) said yesterday, showing a recovery from the Middle East respiratory syndrome (MERS) crisis that gripped the country in the summer.
The result was better than expected. Asia’s fourth-largest economy took a hit after an outbreak of MERS in the country, prompting tourists to cancel trips and keeping local residents away from shopping centers and concert halls.
Consumer spending and construction drove growth, the data showed, overcoming the negative impact of a decline in exports, due partly to weaker Chinese demand.
Compared to the previous quarter, the economy gained 1.2 percent, the first time in 18 months that growth exceeded 1 percent on a quarterly basis. It was also the fastest quarter-to-quarter growth rate in five years.
With consumption and exports slowing earlier this year, the BOK lowered its key policy rate to a record low of 1.5 percent. The government also introduced a tax cut and added an additional public holiday in hopes of boosting spending.
“Consumer spending and the service sector that had contracted in the second quarter showed a recovery,” said Jeon Seung-cheol, director-general of the BOK’s economic statistics department.
“Private consumption improved thanks to the government’s stimulus policies,” he said.
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