South Korea's economy grew at a slower-than-expected rate in the third quarter of the year amid softening export growth, central bank data showed Thursday, raising the possibility that the Bank of Korea may conduct another rate cut earlier than expected after its first rate reduction in over three years this month.

The country's real gross domestic product (GDP) — a key measure of economic growth — gained 0.1 percent on-quarter in the July-September period, according to preliminary data from the Bank of Korea.

The third-quarter figure is sharply lower than the market expectation of a 0.5 percent gain, and compares with the 0.2 percent on-quarter contraction in the April-June period and the 1.3 percent advance in the first quarter of the year.

On a yearly basis, South Korea's economy grew 1.5 percent in the third quarter, slowing from 2.3 percent growth in the second quarter of the year.

Private spending rose 0.5 percent on-quarter in the third quarter, recovering from a 0.2 percent on-quarter dip the previous quarter, the central bank said.

The country's exports contracted 0.4 percent in the third quarter, compared with the 1.2 percent gain the previous quarter, while imports rose 1.5 percent in the July-September period, down from a 1.6 percent advance the previous quarter.

Government spending gained 0.6 percent, and construction investment went down 2.8 percent in the third quarter, further contracting from the previous quarter's 1.7 percent fall, according to the data.

The country may miss the central bank's growth estimate for the year given current trends, a BOK official said, with adjustments for growth and others to be assessed in November.

"Domestic demand has rebounded, but exports slowed sharper than expected," the official said, adding that robust exports may continue down the road.

For the whole year, the bank expects the economy to rebound slightly, at 2.4 percent.

To meet the central bank's forecast, the economy has to grow 1.2 percent on-quarter in the current quarter.

But with the slowing growth in IT exports and geopolitical tensions adding more uncertainties to overseas demand, it may be highly unlikely for Asia's fourth-largest economy to grow as expected this year, according to the BOK official.

Earlier this month, the BOK cut its key interest rate by a quarter percentage point to 3.25 percent, ending its yearslong restrictive policy amid moderating inflation and faltering domestic demand.

The central bank had been in a restrictive mode, delivering seven consecutive hikes in borrowing costs from April 2022 to January 2023 to tame soaring inflation in Asia's fourth-largest economy.

South Korea's economic growth slowed to the lowest in three years in 2023 due to a slump in exports amid tightening monetary policies around the globe.

The economy expanded 1.4 percent last year, decelerating from a 2.6 percent advance in 2022 and 4.3 percent growth in 2021.

The 2023 expansion marks the lowest since a 0.7 percent contraction in 2020 during the coronavirus pandemic. (Yonhap)