South Korean GDP grows at fastest rate since 2002

This bit of news came just after I posted today's Korea News Links (though I did add it as an update): The South Korean economy expanded at the highest rate in seven years, and this has fueled speculation that the Bank of Korea will raise borrowing costs for the first time since the collapse of Lehman Brothers last year. Quoting Bloomberg:

Gross domestic product increased 2.9 percent in the third quarter from three months earlier, when it grew 2.6 percent, the central bank said in Seoul today. That was the fastest pace since the first quarter of 2002 and compared with a median estimate of 1.9 percent growth in a Bloomberg News survey. From a year earlier, GDP rose 0.6 percent.

South Korea has led a regional rebound with China and Singapore as companies including Hyundai Motor Co. and Samsung Electronics Co. reported surging profits, boosted by exports. South Korea may become the second Group of 20 nation after Australia to raise its benchmark interest rate since the height of the global financial crisis, BNP Paribas SA said this month.

“The bigger-than-expected GDP number definitely adds more weight for an interest-rate increase,” said Go You Sun, an economist at Daewoo Securities Co. in Seoul, who had previously forecast the central bank to raise rates early in 2010. “The number today made a clear basis for the Bank of Korea to justify a rate increase.”

The Wall Street Journal also has the story.