South Korea's economy grew at a steady pace in the first quarter, data showed on Thursday, a sign that a recovery is gaining momentum and reinforcing expectations for an interest rate hike later this year.
Asia's fourth-largest economy grew a seasonally adjusted 0.9 percent in the first quarter on a sequential basis, the central bank estimates showed, the same as in the December quarter but a touch ahead of forecasts.
Growth was underpinned by a sharp upswing in construction spending and a pickup in export growth, that supports recent data showing rising economic momentum.
The data also comes two weeks after a new central bank chief voiced optimism about the economy's performance in the coming months, reinforcing the market's view that the Bank of Korea will start raising interest rates from late this year.
"Advanced economies are expected to recover quickly, leading to better exports, which will also influence domestic spending," said Im No-jung, chief economist at IM Investment & Securities.
"Judging from the data, growth will pick up towards the latter half of the year and the economy will probably grow about 4.1 percent this year," he said, adding the figures back his forecast for an interest rate increase in the fourth quarter.