SEOUL • South Korea rebounded from recession more strongly than expected last quarter, as the fastest export-growth in decades helped buffer the economy from a summer wave of the coronavirus that weighed on consumers.

Gross domestic product (GDP) rose 1.9 per cent in the three months through September from the prior quarter, the Bank of Korea (BOK) reported yesterday. Economists had forecast 1.3 per cent growth.

The biggest jump in exports since 1986 drove the trade-dependent nation's rebound from two quarters of contraction.

South Korea's economy is coming back from its pandemic-triggered recession in a stronger position than most developed nations.

Although the recovery is vulnerable to disruptions in the United States and Europe, where the epidemic is worsening, the country's key chip exports are benefiting from a global shift to work-and study-from-home and China is supporting demand.

"This speaks to the resilience of a manufacturing powerhouse," said economist Oh Jae-young at KB Securities, adding: "South Korea's manufacturing has remained unscathed from the pandemic and now, as developed economies themselves restart production, South Korea's getting a boost."

Last quarter's export recovery fuelled the biggest increase in facilities investment since 2012, led by spending on machinery and transportation equipment, the BOK said. Manufacturing grew 7.6 per cent, the most since 2009.

Consumer spending is also likely to improve after slipping last quarter. A late summer resurgence of coronavirus cases in South Korea that led to tighter social distancing rules has eased in recent weeks and President Moon Jae-in has said the country should seize the chance to restart its recovery.

Despite a second-half recovery, private sector analysts see GDP shrinking for the full year for the first time since the Asian financial crisis in the late 1990s.

The BOK this month pointed to signs of economic green shoots while holding its key interest rate at a record low.

BLOOMBERG