South Korea Q3 GDP +2.9% On Quarter

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South Korea's gross domestic product expanded 2.9 percent in the third quarter of 2009, the Bank of Korea said in an advance reading on Monday morning, growing for the third consecutive quarter.

The GDP came in well ahead of forecasts for between 1.9 and 2.2 percent following the 2.6 percent quarterly expansion in the previous three months. It also marked the fastest growth since a 3.8 percent advance in the first quarter of 2002.

On an annual basis, GDP was up 0.6 percent in the third quarter compared to forecasts for a 0.3 percent decline after the 2.2 percent annual contraction in the second quarter. It also represented the first annual growth in four quarters.

"There was improvement in inventory investment that contributed to both consumer spending and facility investment continuing their upward gains," the bank said in a statement accompanying the data.

The data showed that exports were up 5.1 percent on quarter following the 14.7 percent quarterly surge in the previous three months.

Private consumption was up 1.4 percent after adding 3.6 percent in the second quarter. Facility investment surged 8.9 percent, while construction investment shed 2.1 percent and government spending eased 0.8 percent.

Despite the better than expected data, most analysts predict that the Bank of Korea will keep interest rates on hold at the record low 2 percent through this year's two remaining monetary policy meetings on Nov. 12 and Dec. 10. The bank has kept rates unchanged since Feb. 12, although forecasts call for an increase in the first quarter of 2010.

(Market News Provided by RTTNews)