S. Korea Economy Faces Difficulty in Second Quarter


South Korea's economy is estimated to have grown nearly 6 percent in the first quarter of this year over a year earlier but faces difficulty in the current quarter, a senior Finance Ministry official said on Friday.

The official, who declined to be named, told Reuters by telephone the annual growth rate for the January-March period was estimated to be high due to robust exports against a relatively low rate set in the comparable period a year earlier.

"The growth rate for the first quarter is seen coming at the high end of the 5 percent range due to robust exports and strong production performance and the technical effect from a low growth base in the same period of last year," said the official.

South Korean officials do not give named comments unless they are media relations officers.

Asia's fourth-largest economy expanded 5.7 percent in the fourth quarter of 2007 over a year earlier, central bank data has shown.

The remark came a week before the central bank reviews interest rates on April 10, after holding them steady at 5.0 percent for the past seven months in a row.

Local bond investors have bet the Bank of Korea would choose to deliver its first cut in interest rates since late 2004 some time this year to help shield the local economy from slowing global demand.

Official data on first quarter GDP is due out later this month.