Gross domestic product rose 2.9 per cent in the third quarter from three months earlier [EPA]

Gross domestic product (GDP) increased 2.9 per cent in the third quarter from three months earlier, and 0.6 per cent compared with a year earlier, the central Bank of Korea said in an advance estimate on Monday

The quarter-on-quarter growth in July-September was the country's fastest since 3.8 per cent in January-March 2002.

Asia's fourth largest economy had recorded a 2.6 per cent gain quarter-on-quarter in April-June but the figure represented a 2.2 per cent contraction year-on-year.

Aggressive spending

On a year-on-year basis, Monday's figures showed that GDP turned positive for the first time in four quarters.

"Industrial output, led by chips and automobiles, posted robust growth in the third quarter," the bank said in a statement.

"Private consumption and facility investment also grew, contributing to growth."

Its recovery has been fuelled by aggressive government fiscal spending and rate cuts.

Exports have profited from the local currency's sharp drop against the dollar until recently, and overseas stimulus programmes.

Exports rose 5.1 per cent quarter-on-quarter in the three months ending September 30, after jumping 14.7 per cent in the second quarter.

Private spending increased 1.4 per cent compared with a 3.6 per cent gain in the preceding quarter.

Capital investment climbed 8.9 per cent after rising 10.1 per cent in the second quarter, while construction investment declined 2.1 per cent compared with a 1.7 per cent expansion three months earlier.

Asian growth

South Korea's better than expected numbers are the latest indication that Asia is powering the global recovery.

China last week announced its economy grew 8.9 per cent in the third quarter from a year earlier.

The continent's largest economy Japan grew at an annualised rate of 2.3 per cent in the second quarter.

South Korea has recorded a string of positive data recently.

Sales at major department stores increased in September at the fastest pace in eight months.

Manufacturers' confidence remained at a two-year high for a second straight month in October, while major exporters Hyundai, Kia and Hynix Semiconductor have reported strong third-quarter performances.

The central bank said inventory build-up, which rose 2.9 percent quarter-on-quarter, also contributed to the high third-quarter figure.

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