Gross domestic product grew a seasonally adjusted 0.9 percent from the previous quarter and denting expectations for an interest rate cut by the central bank.
The median forecast in the Reuters poll was for Asia’s fourth-largest economy to grow by 0.6 percent in the first quarter over the previous three-month period, when it expanded by 0.3 percent.
“It will be difficult to cut interest rates,” said Kong Dong-rak, a fixed-income analyst at Hanwha Securities. “In fact, once the government’s extra budget package starts kicking in, the central bank may end up raising its growth forecast for the year in July.”
From a year earlier, GDP rose 1.5 percent, compared with growth of 1.4 percent forecast in the Reuters poll and 1.5 percent in the fourth quarter of 2012.
Investment by companies in plant and other production equipment jumped 3.0 percent in the first quarter from the fourth quarter, but underlining the fragile nature of the pick up it was down 11.5 percent from a year earlier. Private consumption fell 0.3 percent on the quarter, reflecting heavy household debt.
Source : Reuters