Advance estimates for South Korean GDP show the economy remained weak in the three months to September. GDP rose just 0.1 percent on the quarter, up modestly from a contraction of 0.2 percent in the three months to June, with year-over-year growth slowing from 2.3 percent to 1.5 percent. This is the slowest year-over-year growth in four quarters. PMI surveys also showed subdued growth in South Korea's manufacturing sector in July and August, followed by contraction in September, with monthly industrial production data showing modest growth.

This subdued headline GDP growth in the three months to September reflects weaker export growth, down 0. 4 percent on the quarter after a previous increase of 1.2 percent. Domestic demand, in contrast, improved. Private consumption rose 0.5 percent on the quarter after contracting by 0.2 percent previously, while investment spending rebounded with an increase of 0.7 percent after falling 1.4 percent previously. Government consumption rose at a steady pace.

At their most recent policy meeting earlier this month, officials at the Bank of Korea reduced policy rates by 25 basis points from 3.50 percent to 3.25 percent. This decision reflected officials' assessment that"that inflation will stabilize at the target level and that the moderate growth trend will continue" Officials also expressed confidence about the growth outlook, forecasting GDP to expand by 2.4 percent this year and by 2.1 percent next year.

South Korea's GDP this quarter is expected to rise 2.1 percent year over year. This is slightly less than last quarter where the GDP rose 2.3 percent year over year.

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.