GDP RETURNS TO GROWTH IN Q3

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Korea's economy has returned to growth after spending nearly the whole year in decline. Recovery in the auto and semiconductor sectors played a pivotal role in boosting the nation's growth. However, with so much uncertainty still looming due to the pandemic as well as low domestic consumption, it remains to be seen if the economy had hit rock bottom.

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According to the Bank of Korea, the nation's third-quarter GDP grew 1.9 percent from the previous quarter. It marks the first economic rebound this year, after continued decline. The return to growth was mainly thanks to a surge in automobile and semiconductor exports, which rose 15.6 percent on-quarter. The boost in exports is being attributedto growing demand in the U.S. and China, as well as robust manufacturing of IT products spurred on by consumers avoiding physical contact during the pandemic. The BOK says the nation's economy is growing faster than expected. However, it's maintaining a cautious view on whether the rebound came from rock bottom. Given that Korea posted its worst growth in the second quarter, Q3 figures couldbe seen as a base effect.

[Soundbite] PARK YANG-SOO(BANK OF KOREA) : "It's too early to say if the Korean economy has achieved V-shaped growth, as it falls short of 2019's Q4 level and is not expanding as much as it used to."

The key is private consumption. Growth can be only be seen if consumption, which fell following a COVID-19 resurgence in mid-August, recovers along with exports. The government is also focusing on resuming the supply of consumption vouchers and holding discount events in a bid to prop up domestic consumption. However, the nation's growth still depends on whether or not the global pandemic expands further.

[Soundbite] CHO YOUNG-MOO(LG ECONOMIC RESEARCH INSTITUTE) : "It's an unusual situation. We should base our estimates on pandemic developments, overseas demand and whether or not Korean goods will continue to sell well while China and other countries are struggling."

The BOK says if the current trends in the economy and the pandemic continue, then the nation's economy will be able to meet this year's forecast of minus 1.3 percent.