South Korea's GRDP Surges 1.9% in Q3, Fueled by Chip and Auto Exports

South Korea's export engine is roaring back to life, but a chill remains in the domestic economy. The nation's gross regional domestic product (GRDP) grew 1.9% year-on-year in the third quarter of 2025, a sharp acceleration from the previous quarter's 0.6% rise, according to government data released on December 26. This marks the first time growth has surpassed the 1% threshold since the third quarter of last year.

Exports Power the Manufacturing Surge

The recovery was largely driven by robust outbound shipments of semiconductors, automobiles, and ships. According to the Ministry of Statistics, output in the mining and manufacturing sectors in the greater capital region jumped 7% from a year earlier, far exceeding the national average increase of 4.2%. This performance underscores the continued strength of South Korea's key export industries in the global market.

A Tale of Two Economies: Services Revive, Construction Slumps

The domestic economy presents a divided picture. The service sector showed clear signs of recovery, expanding 2.2% on-year, buoyed by wholesale, retail, and financial services. Notably, the accommodation and food services industry grew 1.6%, snapping a nine-quarter streak of contraction that began in Q2 2023.

In stark contrast, the construction sector continued to struggle, with its GRDP falling 7.3%. It's the sector's sixth straight quarter of contraction. However, there's a sliver of hope as the pace of decline has eased since the first quarter, when output plunged by 12.3%.