The Korean economy expanded at a faster pace than estimated earlier in the first quarter on strong consumer spending and exports, the central bank said Friday, underpinning optimism about the economic recovery.
The economy grew 2.1 percent in the January-March period from the previous quarter, compared with an earlier estimate of 1.8 percent in April, the Bank of Korea said. Asia's fourth-largest economy also grew 8.1 percent from a year earlier, more than the previous 7.8 percent.
Last year, the Korean economy avoided a yearly contraction by expanding 0.2 percent, thanks largely to government spending and key rate cuts. But it marked the slowest growth since a 5.7 percent contraction in 1998 when the country was in the midst of the Asian financial meltdown. In 2008, the economy here expanded a revised 2.3 percent.
The economy has been on a recovery track, but economic uncertainty at home and abroad as well as the still-sluggish job market are prompting policymakers to strike a cautious tone on the pace of the recovery.
The BOK froze its key interest rate at a record low of 2 percent for the 15th straight month in May amid heightened economic uncertainty stemming from fiscal problems in Europe. It slashed the rate by a total of 3.25 percentage points between October 2008 and February 2009 in an effort to bolster the slumping economy.