South Korea's economy appears to be on a faster track than expected because the rising global economy bought more of its goods and helped big foreign companies pledge more investment, government data showed on Wednesday.
The news came as the central bank was poised to hold interest rates unchanged at a record low at its policy meeting on Thursday because fragile domestic demand outweighs booming exports or surges in raw material prices.
A central bank economist said gross domestic product in the first quarter was estimated to have grown faster than the bank's forecast for a 4.3 percent rise on the year because red-hot export growth had boosted industrial production.
"The growth rate will probably be high, mainly thanks to strong exports, although domestic consumption is still weak," said Chang Min, an economist at the Bank of Korea.
South Korea's exports in the first quarter rose 39 percent to a record $59.79 billion from a year before, led by more than a 50 percent rise in sales to China and by 50 to 70 percent rises in sales abroad of electronic goods and autos.
Separate government data showed the retail and wholesale industries grew 1.2 percent in the year to February after an 11-month falling streak and foreign direct investment plans received in the first quarter nearly tripled compared with the same year-ago period.
But economists said it was premature to say South Korea - which has a reputation for frequent labour disruptions at factories and wage rises far outpacing productivity growth -has completely regained confidence among foreign investors.
Local stock and currency markets closed higher because of the data.
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