The Bank of Korea on Oct. 27 said the economy in the third quarter grew 1% from the second. Shown are containers piled high and ready for shipping at Pier 3 of Busan New Port. (Busan Port Authority)

By Hong Angie

The economy in the third quarter grew faster than market expectations, driven by strong semiconductor exports and sharp increases in both government spending and facility investment.

The Bank of Korea on Oct. 27, quoting its estimates of gross domestic product from July through last month, cited growth of 1% in the third quarter from the second, more than triple its earlier forecast of 0.3%.

This also greatly raised the probability of an upgrade in the annual growth target of 3.3%.

By sector, exports remained strong on the back of a favorable market for semiconductors, while facility investment rose 4.1% thanks to chip manufacturing equipment. Government consumption went up 1.9% driven by higher spending on goods and health insurance benefits, contributing to overall growth.

In contributions to growth, the public sector contributed eight-tenths of a percentage point, playing a major role in supporting the economy, while facility investment added four-tenths of a point.

Gross domestic income, a gauge of the economy's overall purchasing power, also saw its highest growth in around 49 years, attesting to further improvement in the economy's underlying fundamentals.

shong9412@korea.kr