South Korea’s economy expanded at its fastest pace in over a year, with third-quarter GDP growth surpassing analysts’ estimates, according to advance data from the Bank of Korea. Year-on-year, GDP rose 1.7%, ahead of the 1.5% expected by economists, following a 0.6% growth in the previous quarter. The expansion was largely driven by exports and a strong manufacturing sector, which grew 6% and 3.3% respectively, while the construction sector contracted 8.1%, acting as the biggest drag on growth. Exports of goods and services, led by semiconductors and motor vehicles, recorded their fastest growth since Q3 2024. On a quarter-on-quarter basis, GDP rose 1.2%, exceeding the 0.9% forecast. The data comes amid ongoing trade negotiations with the U.S., as South Korean President Lee Jae Myung and the Trump administration remain deadlocked over Seoul’s $350 billion investment pledge, despite a recent trade deal lowering tariffs to 15% from the previously announced 25%. The Bank of Korea noted that domestic demand is recovering and exports are expected to remain favorable, although U.S. tariffs may gradually affect trade. The central bank has forecast full-year growth of 0.9% for 2025 and 1.6% for 2026.