The South Korean economy expanded faster at 1.7 percent in the first quarter against the previous three-month period from the preliminary number of 1.6 percent on stronger exports and manufacturing output, according to finalized gross domestic product (GDP) data from the Bank of Korea.

The upward revision reflected higher gains of 1.1 percentage points in manufacturing output and 1.3 percentage points in exports based on full March data.

Service sector output shed 0.1 percentage point and capital investment 0.4 percentage point from earlier figures.

The real gross national income (GNI) was up 2.4 percent on quarter.

Markets had muted reaction to the better-than-expected performance in the morning trade Wednesday. The main Kospi closed 0.97 percent down at 3,216.18 on Wednesday. The Korean won was down 1.2 to 1,115.4 against the U.S. dollar.

In the pandemic year of 2020, GDP contracted 1.3 percent and 3.2 percent in the first and second quarters and turned positive in the second half to growths of 2.1 percent in the third and 1.2 percent in the fourth for an annualized fall of 1.0 percent, the worst since the Asian financial crisis of 1997-1998.

The government and BOK have upped this year’s growth estimate to 4.0 percent from 3.0 percent upon faster-than-expected recovery in external demand.

Manufacturing output grew 3.8 percent on quarter in the first quarter led by transportation equipment, computers, electronic and optic devices, and chemical products. The service sector gained 0.7 percent on wholesale/retail and accommodations/restaurant services, financial and insurance businesses and education services.

Facilities investment jumped 6.1 percent on increased spending in machinery and transportation equipment.

Exports gained 2.0 percent on quarter, driven by strong global demand for Korean automobiles and smartphones. Imports also were up 2.9 percent led by machinery and equipment, and primary metal products.

Private consumption added 1.2 percent amid an increase in demand for durable goods like automobiles, and government spending also rose 1.6 percent on fiscal stimuli.

The gross savings rate climbed 0.3 percentage point on quarter to 37.4 percent as the 2.2 percent growth in the gross national disposable income outpaced the 1.8 percent rise in the final consumption expenditure.

By Lee Ha-yeon

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]