Anchor: The South Korean economy grew nearly two percent in the third quarter after witnessing severe contractions for two straight quarters amid the economic fallout of the COVID-19 pandemic. While noting that the economy is on a track to recover, the government cited the resurgence of COVID-19 in Europe and the U.S. as potential risk factors in the fourth quarter.
Kim Bum-soo has more.

Report: South Korea saw its first quarterly economic growth since the coronavirus pandemic wreaked havoc on the global economy.

As the Bank of Korea announced the one-point-nine percent GDP growth in the third quarter on Tuesday, Finance Minister Hong Nam-ki said the Korean economy is back on track.

[Sound bite: Finance Minister Hong Nam-ki (Korean-English translation)]
"It's hugely meaningful in giving us a sense of expectancy that we'll overcome the crisis that we've entered a recovery path for economic normalization, with the growth trend significantly rallying focused initially on exports. The growth trend rallied in the third quarter as exports improved quickly on the back of economic recoveries in major countries such as China and favorable IT exports. And the momentum for recovery is continuing with daily average exports in October exceeding what they were last year." 

The Korean economy contracted one-point-three percent in the first quarter and hit the worst in eleven years in the second quarter, posting minus three-point-two percent growth. 

Finance Minister Hong said the quarterly expansion could have been greater by point-five percentage points were it not for the second wave of coronavirus infections in August, which led to a near-lockdown, especially in the Seoul area.

[Sound bite: Finance Minister Hong Nam-ki (Korean-English translation)]
"On the other hand, the re-spread of COVID-19 in August caused much pain and regret. That is to say, the re-spread shrank once again internal demand, which had been recovering in June and July, and limiting significantly the depth of the growth recovery. Consumption of goods had recovered to what it was prior to the crisis, but private sector consumption nevertheless contracted due to increasingly sluggish consumption of face-to-face services. It showed itself as a factor driving down the growth rate by zero-point-five percentage points. If the recovery in consumption had continued in the second quarter without the re-spread of COVID-19 in mid-August, it's estimated that the third-quarter growth rate could have also been in the mid-two percent range." 

After posting the worst contraction in 56 years in the second quarter, outbound shipments grew by 15-point-six percent in the third quarter, thanks to exports of cars and semiconductors. Domestic spending, however, declined point-one percent, due to the reactivated stricter quarantine campaign in the summer.

The minister said that the government will do its best to balance between quarantine and economy, citing the worsening COVID-19 situation and uncertainties related to the U.S. presidential election as risk factors in the fourth quarter.

In August, the central bank projected the economy will shrink one-point-three percent throughout this year. To meet that target, the Korean economy must grow at least by zero to zero-point-four percent in the current quarter.
Kim Bum-soo, KBS World Radio News.