S. Korea posts 1.5 pct GDP growth in Q2

South Korea's economy grew 1.5 percent in the second quarter of 2010, compared to the previous quarter, on the back of brisk exports and consumer spending, the central bank said Monday.

According to the Bank of Korea (BOK), the South Korean economy real gross domestic product (GDP) saw a 1.5 percent gain quarter- on-quarter in the April-June period, while its year-on-year growth marked 7.2 percent during the cited period.

"The (South Korean) economy has been maintaining its stronger- than-expected growth pace, hinting at a possibility that it may have already entered an expansionary phase," Kim Myung-kee, director general of the BOK's economic statistics division, told a press conference.

According to the BOK, on the production side, the manufacturing sector recorded a growth rate of 5.1 percent, mainly due to the growth in machinery equipment, fabricated metal products and automobile manufacturing.

The construction sector showed negative growth of 0.8 percent, which was attributable to the sluggishness in residential-building construction, the BOK said.

Services rose by 0.2 percent, reflecting an increase in the wholesale and retail trade, restaurant and hotel and the transport and storage sectors, which offset the decline of the financial intermediation and the real estate and renting sectors, it added.

With the Q2 data lending support to recent optimism about the economic recovery, the BOK in early-July made an unexpected key rate hike, raising the rate by 0.25 percentage point from a record low of 2 percent.

Upon the rate hike, the BOK cited rising inflationary pressure and hinted at the start of South Korea's exit strategy.

Source: Xinhua