SEOUL: South Korea's gross domestic product (GDP) grew in the third quarter thanks to the recovery in consumption and investment that offset the export slump, reported Xinhua citing central bank data Thursday.

The seasonally-adjusted real GDP, modified for inflation, gained 0.1 per cent in the July-September quarter compared to the previous quarter after contracting 0.2 per cent in the April-June quarter, according to the Bank of Korea (BOK).

The rebound was attributed to the turnaround in private consumption and facility investment that offset the export fall.

Export, which accounts for about half of the export-driven economy, declined 0.4 per cent in the third quarter on a quarterly basis, turning downward from an increase of 1.2 per cent in the second quarter.

Import climbed 1.5 per cent on strong demand for machinery and equipment.

Private consumption, another growth engine of the Asian economy, rose 0.5 per cent in the third quarter from three months earlier after going down 0.2 per cent in the second quarter.

The turnaround was ascribed to higher demand for cars and mobile devices as well as medical and transport services.

Facility investment rebounded 6.9 per cent in the July-September quarter owing to solid demand for machinery and transport equipment, after retreating 2.0 percent in the first quarter and 1.2 per cent in the second quarter.

Despite the recovery in consumption and investment, uncertainties remained over the economy as geopolitical risks in the Middle East and Europe lifted volatility in the won/dollar exchange rate.

The real estate market remained sluggish. The BOK cut its benchmark interest rate by 25 basis points to 3.25 per cent earlier this month to bolster the housing transactions.

Fiscal spending added 0.6 per cent, but construction investment reduced 2.8 per cent in the third quarter after sliding 1.7 per cent in the previous quarter.

Investment in intellectual property slipped 0.1 per cent, while inventory raised the real GDP by 0.3 percentage points.

By industry, the seasonally-adjusted production in the manufacturing sector swelled 0.2 per cent in the third quarter compared to the previous quarter.

Production in the service industry expanded 0.2 per cent, but output in the construction segment shrank 0.7 per cent.

Output in the agricultural, livestock and fishery industries advanced 3.4 per cent in the third quarter, while production in the electricity, natural gas, and water sectors mounted 5.1 per cent.

Real gross domestic income was up 0.5 percent during the July-September quarter after decreasing 1.2 percent in the previous quarter.