Q3 GDP growth seen at 0.5 vs 0.2 previous quarter, up 2.0 on year
GDP data due on Oct. 24

BENGALURU, Oct 22 Reuters The South Korean economy likely returned to growth last quarter after a mild contraction in the prior quarter thanks to an exportled expansion that offset higher borrowing costs squeezing domestic demand, a Reuters poll found.

After an unexpected 0.2 contraction in the AprilJune quarter, Asia39;s fourthlargest economy was projected to have grown a seasonally adjusted 0.5 in the third quarter, according to a median forecast from 23 economists.

On an annual basis, the economy expanded 2.0 last quarter, according to the median forecast of 26 economists polled Oct. 1521, down from 2.3 in the previous quarter.

We expect…Q3 GDP data to show lackluster growth. While exports remained robust, sluggish domestic demand, as reflected by various highfrequency indicators, including retail sales and construction, was a drag, said Khoon Goh, head of Asia research at ANZ.

South Korea39;s monthly exports have grown by almost 10 this year on average up to September, largely driven by semiconductor demand from the United States, helping the tradedependent economy avoid a technical recession commonly defined as two consecutive quarters of contraction.

However, the pace of export growth has cooled in recent months as trade moderated with China South Korea39;s top trading partner as well as Japan and India.

High borrowing costs are impacting domestic consumption…