South Korea’s economy accelerated in the third quarter, reducing pressure on the central bank to introduce further monetary stimulus. Policymakers are currently focused on balancing the risks of an overheated housing market with the potential impact of U.S. trade policies.

According to data released by the Bank of Korea on Tuesday, the country’s Gross Domestic Product (GDP) grew by 1.2 percent from July to September compared to the previous quarter. The growth rate surpassed market expectations of 1 percent. On a yearly basis, the economy expanded by 1.7 percent.

This stronger-than-expected performance reflects a recovery in domestic demand and rebounding export activity. Analysts say the solid growth may encourage the central bank to maintain its current monetary policy stance rather than add more stimulus.

Even so, experts warn that the Bank of Korea must closely monitor the overheating housing market and remain cautious about the potential effects of U.S. trade policies on South Korea’s export-driven economy.