South Korea's economy expands at fastest clip in 3 quarters

Visitors take their souvenir photo at the Gyeongbok Palace, one of South Korea's well-known landmarks, in Seoul, South Korea, Friday, Oct. 23, 2015. South Korea's economy expanded 2.6 percent in the July-September quarter from a year ago, the fastest 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. (AP Photo/Lee Jin-man) (The Associated Press)

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Tourists visit the Gyeongbok Palace, one of South Korea's well-known landmarks, in Seoul, South Korea, Friday, Oct. 23, 2015. South Korea's economy expanded 2.6 percent in the July-September quarter from a year ago, the fastest 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. (AP Photo/Lee Jin-man) (The Associated Press)

SEOUL, South Korea – South Korea's economy expanded at the fastest clip in three quarters during the July-September period.

The Bank of Korea said Friday that Asia's fourth-largest economy grew 2.6 percent from a year earlier.

From three months ago, it expanded 1.2 percent, the first time in 1 1/2 years that South Korea's economy expanded more than 1 percent on a quarterly basis.

The central bank lowered its key policy rate twice this year to a record low of 1.5 percent as consumer spending slowed and exports dropped.

The government introduced a tax cut and added an additional public holiday to boost the recovery as the Middle East respiratory syndrome sapped consumption while a slowdown in China hit exports.