SEOUL- South Korea’s economic growth beat expectations in the first quarter, extending the country’s export-led recovery as global demand surged and the government maintained support for ailing small businesses.
Gross domestic product (GDP) grew a seasonally adjusted 1.6 percent in the March quarter from three months earlier, the Bank of Korea said on Tuesday, faster than the median estimate of a 1.0 percent growth in a Reuters poll and following a 1.2 percent expansion in the December quarter.
Asia’s fourth-largest economy has continued to gain momentum after shrinking 1.0 percent last year, its worst contraction since 1998, driven by heavy industries such as chip and electronic manufacturing, mostly for exports.
GDP expanded 1.8 percent year-on-year in the January-March period after shrinking a revised 1.2 percent three months earlier, also beating an expected expansion of 1.1 percent.
“Economic growth is peaking this quarter and next, and the momentum is driven by strong capital investment and exports, as factories are racing to fill export orders,” Park Sang-hyun, an economist at Hi Investment & Securities. “Second quarter growth will be just as strong.”
Underpinning the momentum, Hyundai Motor Co last week posted a near tripling of profit to a four-year high in the first-quarter as demand for its luxury cars soared.
Analysts expects profits to also have jumped significantly across South Korean chipmakers such as SK Hynix and Samsung Electronics when they announce first quarter earnings later this week.
