by Yoo Seungki
SEOUL, Oct. 25 (Xinhua) -- South Korea's gross domestic product (GDP) growth stayed at the two-year high level in the third quarter due to a turnaround in facility investment and rising private consumption, central bank data showed Friday.
The country's real GDP, the broadest measure of economic performance, increased 1.1 percent in the third quarter from three months earlier after rising by the same margin in the previous quarter, according to the Bank of Korea (BOK). The reading was the highest since 1.3 percent tallied in the first quarter of 2011.
The GDP growth stayed below 1 percent for eight straight quarters, before jumping to 1.1 percent in the second quarter and hovering at the same level in the third quarter.
From a year earlier, the real GDP expanded 3.3 percent in the third quarter, the highest in seven quarters.
Exports of goods and services, which account for around half of the economy, reduced 0.9 percent on quarter in the third quarter after rising 1.8 percent in the prior quarter.
The reduction was relieved by private consumption, a major growth engine of the economy, which advanced 1.1 percent in the third quarter after gaining 0.7 percent in the second quarter.
Facility investment expanded 1.2 percent in the third quarter from three months earlier, rebounding from a 0.2 percent fall in the previous quarter. Investment in the construction sector kept its upward trend for three straight quarters.
Outlook for the South Korean economy was dimmed due to the currency's persistent appreciation versus the U.S. dollar. After touching this year's high of 1,161 won on June 24, the won-dollar exchange rate continued to fall to this year's low of 1,054.3 won in Thursday's trading.
The foreign exchange authorities, or the BOK and the Finance Ministry, issued a joint statement on Thursday to conduct verbal intervention into the lop-sided market. The statement said the recent movement of the won-dollar exchange rate was excessive and one-sided.
The verbal intervention reflected growing fears in Seoul that the prolonged revaluation of its currency may dent exports, the economy's major growth engine.
The BOK revised down its 2014 growth outlook to 3.8 percent from an earlier forecast of 4 percent, citing dimmer outlook for the global economy. The downward revision came after the International Monetary Fund (IMF) cut its growth forecast for the world economy to 3.6 percent.
The IMF also downgraded its 2014 growth outlook for South Korea to 3.7 percent, lower than the BOK's forecast and the Finance Ministry's estimate of 3.9 percent. The country's parliamentary budget office set its 2014 outlook at 3.5 percent.
The South Korean government unveiled 17.3 trillion won (15 billion U.S. dollars) in extra budget plan in mid-April, and the central bank cut its policy rate by 25 basis points to 2.5 percent in May to help the government's efforts to stimulate the economy.
On the production front, output in the manufacturing sector grew 1.6 percent in the third quarter from three months earlier, accelerating from a 0.9 percent increase in the prior quarter.
Production by service firms increased 0.7 percent over the same period, with that by the construction and agricultural sectors rising 1.2 percent and 2 percent, respectively.