Asia’s fourth-largest economy grew 1.7% in the first quarter from three months earlier, 0.1 percentage point higher than expected, according to preliminary data from the Bank of Korea (BOK).
The country’s annualized growth over the January-March period was also revised to 1.9%, up 0.1 percentage point.
“Investment in facilities increased 6.1%, driven by growth in investment in machinery and transport equipment,” BOK said in a statement.
“Exports grew by 2%, as exports of goods, such as motor vehicles and cell phones, grew,” he said.
Last month, the BOK sharply raised its growth outlook for 2021 to 4% from 3%, while keeping its key rate unchanged at a record level of 0.5%, amid a strong rebound in exports.
BOK Governor Lee Ju-yeol said the pace of economic recovery was faster than expected, but more patience was needed for monetary policy.
However, Lee sounded mildly hawkish when asked about the possibility of a rate hike this year, saying that such a hike “depends on the pace of the recovery.”
Park Yang-su, head of BOK’s economic statistics bureau, told reporters that if the economy grows 0.7% or 0.8% on a quarterly basis by the fourth quarter of this year, the Annual GDP would increase by 4.1% or 4.2% this year.
In the first quarter, private consumption grew 1.2% quarter-on-quarter and investment in construction rose 1.3% from the previous quarter, BOK said.
South Korea’s economy shrank 0.9% in 2020, 0.1 percentage point higher than the previous estimate.
However, this is the first annual contraction since 1998, when the economy shrank 5.1% due to the Asian financial crisis.
In 2019, the economy grew by 2.2%, accelerating from its previous estimate of 2%.
Meanwhile, the BOK said the country’s gross national income (GNI) rose 2.4% in the first quarter compared to three months earlier.
“Real GNI increased by 2.4% from the previous quarter, growing more than real GDP (1.7%), due to the increase in net factor income of the rest of the world and the improvement terms of trade, âBOK said.
In terms of US dollar value, the country’s per capita income stood at $ 31,881 in 2020, down 1% from the previous year. (Yonhap)