The key facts

  • South Korea's GDP grew 1.0% quarter on quarter in Q3, versus the Bank of Korea's August forecast of 0.3%
  • Semiconductor exports rose 218.7% year on year to $148 billion
  • Real gross domestic income (GDI) grew 18.8% — the fastest pace in almost 49 years

Growth tripled the central bank's forecast

South Korea's economy grew more than three times faster than expected in the third quarter of 2026: according to preliminary data from the Bank of Korea, GDP rose 1.0% compared with the previous quarter, while the regulator's August forecast had projected growth of only 0.3%. Year on year, the economy expanded 3.4% — slightly less than the 3.7% recorded in the second quarter. This was reported by Euronews, citing central bank datapublished on Tuesday, October 27.

Semiconductors as the driving force

The main driver was exports, which grew 2.3% 'primarily thanks to shipments of semiconductors, machinery and electrical equipment,' the Bank of Korea noted. Investment in fixed capital increased 4.1%, mainly due to spending on chip manufacturing equipment. According to government statistics, semiconductor exports in the third quarter soared 218.7% year on year, reaching $148 billion (€127 billion). Real gross domestic income (GDI), which reflects purchasing power, rose 18.8% year on year — the fastest pace in almost 49 years — against the backdrop of rising semiconductor prices. Kwon Hyo-seon of Bloomberg Economics noted that the data confirm 'the Bank of Korea's optimistic assessment… that booming chip demand is supporting strong export and investment performance.'

Growth concentrated in a single sector raises concerns

Analysts nevertheless warn that growth remains heavily concentrated in the semiconductor industry. 'The risk is that growth will remain heavily concentrated in the semiconductor sector, leaving South Korea vulnerable to a possible slowdown in global AI spending,' noted John Bromhead, senior economist at Moody's Analytics. The surge in chip demand has also pushed the country's current account surplus to record levels: it stood at $116.6 billion (€100 billion) in the second quarter. Notably, this is not the first strong quarter: in the first quarter, GDP grew 1.7% quarter on quarter — the fastest pace in more than five years — also on the back of sustained semiconductor demand.