S. Korea's central bank upgrades Q3 growth rate

South Korea's central bank on Friday revised the third-quarter growth rate upward, citing stronger-than-expected growth in the manufacturing sector.

Asia's fourth-largest economy expanded 4.8 percent in the July-September period from a year earlier, up from an initial estimate of 4.6 percent made in October, according to the Bank of Korea. Compared with a quarter earlier, the economy grew 1.1 percent, up from an initially estimated 0.9 percent expansion.

Gross domestic product, the broadest measure of an economy's performance, is the total value of goods and services produced within the economy in a given period.

"The data has edged up, but the changes are relatively minor ones and we expect the downside risks to persist until the first half next year," said Lee Sung-kwon, an economist at Goodmorning Shinhan Securities. "At least for this year, however, the economy will expand around 5 percent as widely expected."

The manufacturing sector grew at a faster-than-expected pace of 2.4 percent in the third quarter from a quarter earlier, while the construction and service industries gained at a stronger-than-expected pace of 3.1 percent and 0.6 percent, respectively.

Business investment rose 3.5 percent in the third quarter from the previous quarter, a larger increase than the bank's initial projection of a 3.1 percent gain.

Private spending, one of the main growth engines of the South Korean economy, grew at 0.6 percent in the third quarter from a quarter earlier, while exports of goods rose 2.9 percent. Both figures were higher than the bank's previous estimates.

The real gross national income (GNI), a gauge of public purchasing power, made no gain in the third quarter from a quarter earlier due to mounting trade losses, the central bank said.

"The prices of South Korea's tech exports are falling and oil prices continue to rise, boosting the trade loss," a central bank official said. "As oil prices tame, the real GNI will improve in the fourth quarter."

South Korea's economy is expected to expand at above 5 percent this year on the back of a recovery in private spending and resilient exports. A firmer won versus the U.S. dollar and soaring property prices, however, have caused concern for government policymakers about the economic recovery.

For next year, the economy is forecast to expand at a mid-4-percent pace.

Seoul, Dec. 1 (Yonhap News)