Bank of Korea Revises 3rd Quarter GDP Growth Rate Up to 2.1% (Update)

[Asia Economy Reporter Kim Eunbyeol] The preliminary real Gross Domestic Product (GDP) growth rate for the third quarter of this year was revised upward by 0.2 percentage points to 2.1% from the flash estimate of 1.9% announced last October. This adjustment was influenced by increases in facility investment and construction investment, as well as an upward revision in private consumption.

On the 1st, the Bank of Korea revised the third-quarter GDP growth rate from the previous 1.9% to 2.1% in its '2020 Third Quarter National Income (Preliminary)' announcement. As a result, the quarterly real GDP growth rate marked the highest level since the third quarter of 2009 (3.0%). It also rose significantly compared to the previous quarter (-3.2%).

By expenditure category, private consumption recorded 0.0%, an upward revision of 0.1 percentage points from the flash estimate, as services (such as food and accommodation) decreased but non-durables (such as groceries) increased. Facility investment rose by 8.1%, up 1.4 percentage points from the flash estimate, thanks to increases in transportation equipment and machinery. Construction investment decreased by 7.3%, mainly in civil engineering construction, but was revised upward by 0.5 percentage points compared to the flash estimate. Exports increased by 16.0%, driven by automobiles and semiconductors, while imports rose by 5.6%, due to increases in crude oil and chemical products.

This preliminary growth rate was calculated by reflecting all data up to September, unlike the flash estimate which was based on surveys conducted in July and August.

The nominal GDP growth rate, which reflects price changes, recorded 2.8%, reversing the decline from the second quarter (-1.0%). The nominal Gross National Income (GNI) for the third quarter increased by 2.5% quarter-on-quarter, falling short of the nominal GDP growth rate.

The real GNI growth rate was 2.4%, exceeding the real GDP growth rate (2.1%) due to improvements in terms of trade.

With the improvement in nominal GDP growth, the GDP deflator (nominal GDP/real GDP) rose by 2.0% year-on-year. The GDP deflator had recorded a positive figure of 1.2% in the second quarter for the first time in six quarters, and this time it increased by 0.8 percentage points more than in the second quarter.