South Korea’s economy grew the most in nine quarters, on stronger government spending and private consumption even as a slowdown in China clouds the outlook.
Gross domestic product rose 1.1 percent in April-to-June from the previous quarter after 0.8 percent growth in January-to-March, the Bank of Korea said today in a statement in Seoul. That was above the median 0.8 percent estimate of 13 economists surveyed by Bloomberg News. From a year earlier, Asia’s fourth-largest economy expanded 2.3 percent.
President Park Geun Hye boosted spending and the central bank cut its key rate in May, buttressing the economy against a sluggish property market and slower growth in China, South Korea’s biggest trading partner. The central bank is counting on improving domestic demand and resilient exports to achieve forecasts for expansions of 2.8 percent this year and 4 percent next year, the fastest since 2010, when the economy was pulling out of a global slump.
“I’m pretty optimistic now,” Park Sang Hyun, a Seoul-based economist at Hi Investment and Securities Co. said before the announcement. “Still, the Bank of Korea will keep an easy monetary policy stance until a full-speed economic recovery builds up inflationary pressures.”