SEOUL, Oct 28, 2025 (BSS/AFP) - South Korea's economy grew 1.2 percent in the third quarter, preliminary data from the central bank showed Tuesday, with consumption boosted by government vouchers and exports remaining strong despite global trade tensions.

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

"Private consumption grew by 1.3 percent, 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 percent, it added.

President Lee Jae Myung's administration issued vouchers this year worth at least 150,000 won ($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 percent 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 percent 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 $350 billion in the United States.

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

The country recorded its highest-ever monthly semiconductor exports in September, totalling $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 percent annual growth.