SEOUL, South Korea – South Korea’s economy expanded at the fastest clip in nearly two years in the latest quarter as companies increased machinery purchases and consumers spent more.
The Bank of Korea said Friday that Asia’s fourth-largest economy grew 3.3 per cent in the third quarter over a year earlier, the highest rate in seven quarters, showing that a recovery is gaining traction.
From the previous three months, the economy expanded 1.1 per cent, the same level as the second quarter.
Economic growth has gotten a lift from government stimulus spending and a central bank interest rate cut in May.
The central bank said capital expenditure turned higher for the first time in six quarters led by the machinery industry. Consumer spending also picked up while growth in exports slowed.
Earlier this month, the central bank left its key interest rate at 2.5 per cent for a fifth month. But it lowered South Korea’s growth forecast for 2014 to 3.8 per cent from 4 per cent, citing global economic uncertainty.