South Korean economy sees better than expected growth

| April 27, 2011 | 0 Comments
South Korean economy sees better than expected growth

South Korea, which is Asia’s fourth largest economy, has experienced growth of 4.2% in the first quarter on an annual basis, according to official data today.

The economy grew by 1.4% in the January to March quarter from the previous three months - the fastest rate in nine months.

The better than expected growth was attributed to rising exports and an increase in domestic spending.

However, the economy faces headwinds. Like many other Asian economies, South Korea is battling with soaring inflation, driven by higher food and oil prices.

The latest figures from Statistics Korea showed the consumer price index rose by 4.7% in March on an annual basis – a 29-month high.

The rate is now at the higher end of the central bank’s 2%-4% target and this, together with the strong growth, is likely to result in a further interest rate hike next month, according to analysts.

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