Advance estimates for South Korean GDP show the economy expanded at a steady pace in the three months to September. GDP rose 0.6 percent on the quarter, as it did in the three months to June, with year-over-year growth picking up from 0.9 percent to 1.4 percent. PMI surveys, in contrast, showed ongoing contraction in South Korea's manufacturing sector during the quarter, with monthly industrial production data again showing volatile conditions.

Steady headline GDP growth in the three months to September reflects offsetting moves in major components. Private consumption rose 0.3 percent on the quarter after falling 0.1 percent in the three months to June, while investment rose 0.4 percent after dropping 0.1 percent previously. Exports also rose strongly after a previous decline, but the impact of this on headline growth was offset by an even sharper rebound in imports, largely reflecting higher petroleum imports.

At their most recent policy meeting last week, officials at the Bank of Korea left policy rates on hold at 3.50 percent for the sixth consecutive time. This decision reflected officials' assessment that price pressures are likely to moderate over the rest of this year and 2024. Officials also judged that"domestic economic growth has continued to improve at a modest pace" in response to better export performance and noted that they expect conditions to improve further.

Third-quarter GDP is expected to rise 0.7 percent on the quarter and rise 1.1 percent on the year. These would compare respectively with growth of 0.6 and 0.9 percent in the second quarter.

GDP data are a comprehensive measure of South Korea’s overall production and consumption of goods and services. GDP serves as one of the primary measures of overall economic well-being. GDP calculates the total market value of goods and services produced in South Korea within a given period after deducting the cost of goods and services used up in the process of production. Therefore, GDP excludes intermediate goods and services and considers final aggregates only.

Gross domestic product (GDP) can be measured using three approaches, namely the production, income and expenditure approaches. The production measure of GDP is derived from firm level data and estimates the value added by all producing industries in the South Korea economy. The income measure of GDP is derived from earnings data and estimates how the income earned from these producing industries is then distributed throughout the economy as returns to labor, capital and government. The expenditure measure of GDP is derived from data estimating spending on goods and services by final end users and includes consumption, investment and exports minus the value of imports.

GDP is the all-inclusive measure of economic activity. Investors need to closely track the economy because it usually dictates how investments will perform. Investors in the stock market like to see healthy economic growth because robust business activity translates to higher corporate profits. Bond investors are more highly sensitive to inflation and robust economic activity could potentially pave the road to inflation. By tracking economic data such as GDP, investors will know what the economic backdrop is for these markets and their portfolios. The GDP report contains a treasure-trove of information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. GDP components such as consumer spending, business and residential investment, and price (inflation) indexes illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.