South Korea growth tops forecast as chip boom masks weak demand

South Korea’s economy grew faster than expected in the third quarter as an artificial intelligence-fueled chip boom powered exports and investment, but a contraction in consumption underscored an increasingly uneven expansion that may complicate the trajectory for further interest-rate hikes. Gross domestic product expanded 1% in the three months ended September from the previous quarter, the Bank of Korea said Tuesday, after growing 0.6% in the April-June period. That exceeded the median estimate of 0.8% in a Bloomberg survey of economists.

The economy grew 3.4% from a year earlier, compared with a forecast of 3.1%. This followed 3.7% year-on-year growth in the second quarter.