South Korea’s GDP growth beats forecasts amid AI boom

South Korea's economy grew much faster than projected in the July-September quarter against the backdrop of booming demand for chips applied in artificial intelligence (AI).

Key points

• South Korean Finance Minister Lee Hyoung-il remarked earlier this month that he anticipated expansion to reach 3.4-3.6 percent in 2026.
• South Korea's exports in September surged 83.5 percent year-on-year to $120.9bn, with chips accounting for almost half of all shipments, according to the Korea Customs Service.
• Gross domestic product (GDP) expanded 1 percent on a quarterly basis, or 3.4 percent year-on-year, advance estimates published by the Bank of Korea demonstrated on Tuesday.
• While investment in construction edged up 0.7 percent, investment in facilities and intellectual property rose 4.1 percent and 2.3 percent, respectively.
• South Korea's economy grew 1 percent in 2025, its slowest expansion since the pandemic.

For context, the Bank of Korea forecast in August that GDP would grow 0.3 percent in the third quarter.

Exports, which account for regarding 45 percent of South Korea's GDP, rose 2.3 percent quarter-on-quarter, driven by semiconductors, machinery and electrical equipment, according to the central bank.

Despite the robust expansion in exports and investment, private consumption fell 0.2 percent.

For context, the latest results put the South Korean economy well on track to achieve its biggest economic expansion in more than a decade.

South Korean Finance Minister Lee Hyoung-il remarked earlier this month that he anticipated expansion to reach 3.4-3.6 percent in 2026. It would be the strongest performance since 2011, excluding the COVID-19 pandemic.

Asia's fourth-largest economy has capitalised on the AI boom against the backdrop of a global shortage of memory chips.

South Korea is home to two of the three largest memory chip makers, SK Hynix and Samsung Electronics. It together control roughly 80 percent of the global market for high-bandwidth memory and 60 percent of the market for dynamic random-access memory.

In short, south Korea's GDP growth beats forecasts amid AI boom is the central thread here, and readers can expect follow-up reporting as the picture becomes clearer.