Seoul: Surging exports and consumer spending fuelled growth of 2.3 percent for South Korea's economy in the three months to June, its fastest rate in more than five years, data showed Friday.
The quarter-on-quarter growth in gross domestic product (GDP) was up sharply from the first quarter's slender gain of 0.1 percent, the central Bank of Korea said.
"Exports of goods sharply rebounded and consumer spending picked up in the second quarter," it said in a statement.
It marked the fastest growth of GDP for Asia's fourth-largest economy since a 2.6 percent increase in the fourth quarter of 2003.
But compared with a year earlier, the economy shrank 2.5 percent.
"It must be noted that the first-quarter performance was so poor that the quarter-on-quarter growth rate in the following quarter appears to be spectacular," economist Chang Min of the Korea Institute of Finance told reporters.
He noted that the government and the central bank had been implementing hefty fiscal spending and aggressively cutting interest rates to bolster the slumping economy.
"You could say the economy has taken steps to move out of recession, but it's hard to say the economy has returned to the path to recovery," Chang said.
Exports jumped 14.7 percent in the second quarter from the previous three months, following a 3.4 percent decline in the first quarter.
Private spending gained 3.3 percent from the previous quarter, compared with a 0.4 percent gain in the preceding quarter, led by a sharp increase in durable goods such as cars.
Other economists said South Korea's growth momentum would likely remain solid in the second half, helped by the export recovery, a pick-up in domestic demand and the continuing impact of stimulus measures.
"As global demand continues to improve and with China staging a V-shaped recovery, Korea's exports are well positioned to recover faster than others due to its gain in market share," Sharon Lam of Morgan Stanley said.
"Korea stands to benefit from any strong rebound in China, as it is China's second-largest import source," she told Dow Jones Newswires.
China accounted for 12 percent of South Korea's GDP in 2008.
Bureau Report
First Published: Friday, July 24, 2009, 11:28