SEOUL: A rebound in consumer spending following the end of a national health scare over an outbreak of the MERS virus saw South Korea’s economic growth accelerate to a five-year high in the third quarter.
According to preliminary data provided by the central Bank of Korea (BOK) on Friday, Asia’s fourth-largest economy expanded by 1.2 percent in the July-September period.
It was the fastest on-quarter growth since the second quarter of 2010, and up from just 0.3 percent in the April-June period.
The central bank said consumers had ventured back into shopping malls as the threat posed by a serious outbreak of Middle East Respiratory Syndrome (MERS) had receded.
Thirty-six people died in the outbreak, during which local businesses including shopping malls, restaurants and cinemas reported a sharp drop in sales as people shunned public venues with large crowds.
The tourism industry was hit particularly hard, with the number of foreign visitors plunging by up to 60 percent.
Private-sector consumption rose 1.1 percent in the third quarter from a contraction in the previous period, Friday’s statement showed, while construction investment gained 4.5 percent as the property market boomed.
Despite the uptick in growth, the economy remains vulnerable to a lengthening slump in exports, which account for about half of South Korea’s gross domestic product.
Earlier this month, the BOK cut its annual economic growth forecast for the fourth time this year and left interest rates at a record low, with bank governor Lee Ju-Yeol warning that “uncertainties surrounding the path to recovery remain high.”
The bank shaved its economic growth forecast for this year to 2.7 percent, from the 2.8 percent it had predicted back in July.