2020.11.3022:20:00UTC+00South Korea Q3 GDP Bumped Up To 2.1%

South Korea's gross domestic product saw an upward revision to a seasonally adjusted increase of 2.1 percent on quarter in the third quarter of 2020, the Bank of Korea said in Tuesday's final reading.

That's up from 1.9 percent in October's advance estimate and it follows the 3.2 percent contraction in the previous three months.

On a yearly basis, GDP was revised up to -1.1 percent from -1.3 percent in the estimate; GDP sank 2.7 percent in Q2.

Real gross national income (real GNI) increased 2.4 percent in the third quarter compared to the previous quarter.

On the production side, manufacturing rose 7.9 percent, mainly due to an increase in computer, electronic and optical products. Construction contracted 5.2 percent, owing to decreases in non-residential building construction and civil engineering. Services grew 0.9 percent, led by health and social work and finance and insurance.

On the expenditure side, private consumption was flat on quarter as expenditures on non-durable goods (e.g. food) increased while expenditures on services (e.g. restaurants and accommodation) decreased. Government consumption rose 0.2 percent, mainly due to increased health care benefits.

Construction investment contracted 7.3 percent as civil engineering decreased. Facilities investment jumped 8.1 percent, led by the growth of investment in transportation equipment and machinery. Exports spiked 16.0 percent as exports of goods such as motor vehicles and semiconductors expanded. Imports were up 5.6 percent, owing to increased imports of crude oil and chemical products.

Nominal GNI rose 2.5 percent in the third quarter relative to the quarter before, increasing less than nominal GDP (2.8 percent) as net factor income from the rest of the world fell. Real GNI gained 2.4 percent on quarter, increasing more than real GDP (2.1 percent) owing to improved terms of trade. The GDP deflator rose 2.0 percent on year.

The gross saving ratio (gross saving/gross national disposable income) stood at 35.7 percent, 1.2 percentage points higher than in the previous quarter, as nominal gross national disposable income (2.3 percent) increased more than the final consumption expenditure (0.4 percent).

The gross domestic investment ratio (gross capital formation/GNDI) was 30.8 percent, 1.8 percentage points lower than in the previous quarter, due to a decrease in construction investment.