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Oct. 26, 2020, 8:55 p.m. EDT

South Korea's economy rebounds in third quarter

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By Kwanwoo Jun

South Korea's economy rebounded in the third quarter on a strong recovery in exports of cars and memory chips after sliding into a pandemic-induced recession.

Gross domestic product expanded by 1.9% during the July-September period from the prior quarter -- the fastest pace since the first quarter of 2010, preliminary Bank of Korea data showed Tuesday.

The reading beats the median forecast by seven economists polled by The Wall Street Journal for a 1.7% expansion.

The economy contracted 3.2% during the April-June period--the weakest quarterly print since late 2018.

The powerful return to growth was largely led by brisk exports, which jumped 15.6% from the prior quarter. Investments in production facilities also increased 6.7% from the previous quarter.

But private consumption and construction investments remained weak, dropping 0.1% and 7.8%, respectively.

Year-on-year, the economy shrank 1.3% in the third quarter following the prior quarter's 2.7% contraction. The latest reading is above the median market forecast for 2.0% contraction.

South Korea's economy has recently gained some strength with exports returning to growth for the first time in seven months in September but still faces challenges from the prolonged pandemic and business restrictions amid a new wave of virus cases.

The central bank expects the economy to shrink 1.3% for 2020, which would be its worst annual performance since the 1998 Asian financial crisis. The bank has kept the base rate at a historic low of 0.50% to support growth

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

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