South Korea’s economy grew 1.0% in the third quarter of 2026, above forecasts, as strong chip exports and investment raised output even though private consumption, or household spending, fell, according to preliminary Bank of Korea data released Tuesday.
The seasonally adjusted increase was faster than the 0.6% growth recorded in Q2. It beat economists’ median estimate of 0.7% and the central bank’s August forecast of 0.3%. Exports rose 2.3%, with semiconductors, machinery and electrical equipment leading the increase.
Investment in facilities climbed 4.1%, supported by spending on equipment used to make semiconductors. Manufacturing output increased 2.0%, with computers, electronics and machinery among the main contributors. The gains led by exports contrasted with a 0.2% fall in private consumption.
This was the first quarterly decline in private consumption in nearly four years. Spending weakened on both goods and services. Government consumption rose 1.9%, helping offset weakness in household spending.
GDP was up 3.4% from a year earlier, following annual growth of 3.7% in the second quarter. The strong quarterly result may lead people to reconsider the Bank of Korea’s 3.3% growth forecast for 2026. But the fall in private spending highlights that the export boom has not yet led to broad-based demand at home.