Gross domestic product (GDP) rose 1.2% during the July–September period compared to the previous quarter, according to the Bank of Korea.

“Private consumption grew by 1.3%, as expenditures on both goods and services increased,” the bank said in a statement.

Compared to the same quarter last year, the economy grew 1.7%, it added.

President Lee Jae Myung’s administration issued vouchers this year worth at least 150,000 won (US$104) per person, regardless of income level, aimed at boosting waning consumption.

That sparked the fastest growth in consumer spending in three years, with a 1.3% quarter-on-quarter increase.

“Consumption is likely to ease soon as the government vouchers expire at the end of November,” said Shivaan Tandon, an analyst at research firm Capital Economics.

Asia’s fourth-largest economy had expanded by 0.7% in the second quarter.

The latest data comes as Seoul works to finalise a trade deal with Washington to avoid steep US tariffs and implement South Korea’s pledge to invest US$350 billion in the United States.

South Korea, which is heavily reliant on exports, saw outbound shipments rise by 1.5% quarter-by-quarter, driven by sustained demand in the semiconductor sector.

The country recorded its highest-ever monthly semiconductor exports in September, totalling US$16.6 billion, despite mounting pressure from US tariffs and other restrictions on the key industry.

The September figure was up more than a fifth year-on-year, according to data from the industry ministry.

That surge was fuelled by strong demand for high-value memory chips such as HBM, used in AI servers, the ministry said.

The central bank has set a target of 0.9% annual growth.