South Korea's economy expanded 2.6 percent in the July-September quarter from a year earlier, the fastest annual clip in three quarters, the Bank of Korea said Friday, showing a recovery from the Middle Eastern respiratory syndrome crisis that gripped the country in the summer.

The result was better than expected. Asia's fourth-largest economy took a hit after a deadly outbreak of MERS in the country, prompting tourists to cancel trips and keeping local residents away from shopping malls and concert halls.

Consumer spending and construction drove growth, the data showed, overcoming the negative impact of a decline in exports, due partly to weaker demand from China.

Compared to the previous quarter, the economy gained 1.2 percent, the first time in 18 months that growth exceeded 1 percent on a quarterly basis. It was the also the fastest quarter-to-quarter growth rate in five years.

With consumption and exports slowing earlier this year, the central bank lowered its key policy rate to a record low of 1.5 percent. The government also introduced a tax cut and added an additional public holiday in hopes that would boost spending.

``Consumer spending and the service sector that had contracted in the second quarter showed a recovery,'' said Jeon Seung-cheol, director general of the BOK's economic statistics department. ``Private consumption improved thanks to the government's stimulus policies.''

South Korean exporters, a key driver of growth, have been hurt by sluggish global demand, a slowing economic growth in China as well as the weak Japanese currency that helped Japanese rivals. Oil refinery companies, which also account for a significant portion in South Korea's exports, saw their bottom line eroded as the price of crude oil fell.

Earlier this month, Bank of Korea trimmed its forecast for South Korea's economy this year to 2.7 percent from 2.8 percent, citing a weaker global economic outlook. (AP)