South Korea’s economy grew by 1% quarter-on-quarter in the third quarter of 2026, surpassing expectations of 0.7% and accelerating from a 0.6% expansion in the previous quarter, preliminary estimates showed. Exports and investment were the key drivers of overall growth, as the global investment in AI sustained demand for semiconductors. Exports rose 2.3%, led by semiconductors, machinery and electrical equipment, while imports grew 2.4%. Facility investment jumped 4.1%, mainly reflecting increased spending on machinery, including semiconductor manufacturing equipment. Construction investment also returned to growth, rising 0.7% as civil engineering activity improved, while government consumption increased 1.9%. By contrast, private consumption fell 0.2%, the first decline in nearly four years as spending on both goods and services decreased. On a yearly basis, the economy expanded by 3.4%, slowing from a 3.7% growth in the second quarter but exceeded forecasts for a 3% increase.