SEOUL – South Korea’s heavily trade-reliant economy barely averted a recession, posting slim growth in the first quarter, but the outlook remained clouded by weak exports due to a cooling global economy, even with China’s reopening.

South Korea’s gross domestic product in the first quarter expanded by 0.3 per cent over the previous three-month period, official advance estimates showed on Tuesday, compared with a median 0.2 per cent rise tipped in a Reuters survey.

Still, economists saw it as little more than a technical rebound after a 0.4 per cent contraction during the final quarter of 2022, which was the first decline in 2½ years, and it reinforced their view that the central bank’s tightening cycle is over.

“I don’t see any sign of strength from the detailed figures about the future path of the economy,” said Mr Oh Suk-tae, economist at Societe Generale Securities in Seoul, adding that he retains his forecast of 0.8 per cent growth for the whole year.

The biggest contributor to GDP during the first quarter was private consumption, which posted a growth of 0.5 per cent, while capital investment dented economic growth, dropping 4 per cent. Exports rose 3.8 per cent, while imports grew 3.5 per cent.

The Bank of Korea said earlier in April that this year’s economic growth would be weaker than its earlier projection of 1.6 per cent, as the central bank kept interest rates steady for the second consecutive meeting in a row.

Economists now expect the Bank of Korea not to hike interest rates further, after having raised them by 300 basis points since late 2021.

Over a year earlier, the country’s GDP expanded 0.8 per cent during the January-to-March period, according to the Bank of Korea’s estimates, compared with gains of 1.3 per cent in the prior quarter and 0.9 per cent tipped in the survey. REUTERS