By Na Jeong-ju
Staff Reporter


The country’s economic growth rose to 4.4 percent from a year earlier in the third quarter from 3.3 percent in the second, boosted by recovering domestic demand and strong exports, the Bank of Korea (BOK) said Tuesday in a preliminary report.

It marks the strongest quarterly growth in four quarters. Real gross domestic product (GDP), the total output of goods and services, gained 1.8 percent from the previous quarter, the strongest seasonally adjusted growth in seven quarters.

The central bank said the GDP data indicate the economy is on a fast recovery track as the demand for goods and services is recovering.

Private consumption climbed 4 percent from a year earlier as expenditure on durable goods, such as TV sets, computers and automobiles, grew. It is the strongest growth rate in 11 quarters. Quarter-on-quarter, it also rose 1.2 percent, maintaining growth of over 1 percent for two consecutive quarters.

Investment in plants and equipment grew 4.5 percent year-on-year on recovering investments in the automobile, airplane and other vehicle-related industries. The growth rate of construction investments fell to 0.4 percent from 1.7 percent in the second quarter, hit by recent government crackdowns on real estate speculation, the BOK said.

``We believe our growth rate will reach 3.8 percent this year as we forecast earlier. Second half growth rate may surpass 4.5 percent,’’ Kim Byung-hwa, head of the BOK’s Economic Statistics Department, said in a briefing.

Third quarter exports grew 13.5 percent from a year ago and 6.5 percent from the previous quarter, the largest quarterly gain since the third quarter of last year.

Kim forecast the growth rate to expand further as exports are expected to gain momentum in the fourth quarter amid encouraging signs for the service industry.

The BOK data boosts optimism that the Korean economy is rebounding strongly after being mired in a long-term slump plagued by weak consumer spending.

Economists and policymakers have become increasingly optimistic over the economic outlook as exports grew solidly and consumer sentiment improved.

``Private consumption has been rebounding since the first quarter and the BOK data shows its growth pace is getting faster,’’ said Hwang In-seong, an economist at the Samsung Economic Research Institute. ``This is an encouraging sign for the Korean economy. The strong growth in consumer spending and exports will drive the economy further.’’

The manufacturing sector grew 7 percent year-on-year in the third quarter, while the construction industry gained a mere 0.6 percent due to sluggish performance in engineering. Service output grew 3.3 percent year-on-year and 2.5 percent from the previous quarter.

jj@koreatimes.co.kr