South Korea's chip export surge fails to boost household spending in Q3

The Bank of Korea reported that South Korea's economy expanded by 1% in the third quarter, outpacing the central bank's 0.3% forecast, thanks to a robust semiconductor export boom. Yet private consumption contracted by 0.2% versus the prior quarter, marking the first dip since the second quarter of 2023. Spending fell across categories, from automobiles and home appliances to financial and dining services.

The central bank linked the slowdown to reduced stock-trading volumes, a full-scale Hyundai Motor strike that delayed vehicle deliveries, and structural issues like high household debt and a greying population. Lee Dong-won noted that a recovery in consumer spending is expected only by early next year, while ongoing inflation from Middle-East tensions and market volatility keep the outlook uncertain. A consumer sentiment survey showed the index slipping to 105.4 in October, indicating growing pessimism about current and future economic conditions.