The economy grew by 0.9% in the January to March quarter from the previous three months, the central bank's estimates showed. 

 

The data is likely to help allay² fears over the health of the Korean economy.

 

Earlier this year, the government cut its growth forecast for the current year amid a slowdown in exports.

 

However, the latest data showed a 3.2% quarter-on-quarter growth in exports during the period. 

 

That compares with a 1.2% drop in the previous quarter.

 

 

South Korea's exports, which account for almost half of its overall output, have been hit by slowing demand in key markets such as the US and the eurozone.

 

Demand in the eurozone has been hurt by the bloc's ongoing³ sovereign debt crisis, while the US economic recovery has also been fragile.

 

Some analysts⁵ warned that despite the positive data, exports continue to be fragile as conditions in those markets have not improved substantially.

 

"I think it's hard to say that the economy is turning around as export growth completely halted," said Jun Min-Kyoo, an economist⁶ at Korea Investment and Securities.

 

"Companies are still panicking about poor exports."

 

There have also been fears over the impact movements in the currency markets may have on Korean exports. 

 

The South Korean won has risen by nearly 10% against the US dollar since May, making its exports more expensive to foreign buyers.

 

Meanwhile, there has been a sharp decline in the Japanese yen⁷, which has dipped almost 20% against the US dollar since November last year, triggered by an aggressive monetary⁸ policy stance by the new Japanese government. 

 

There have been fears that because Japan and South Korea compete in similar markets, Korean goods may lose out as a result of the currency moves and that such developments may also hurt South Korea's overall growth.

 

However, analysts said the latest data indicated that the moves had not had a significant affect on the sector⁹. 

 

"Exports improved even though the yen was depreciating¹⁰（贬值）, suggesting that there hasn't been any major impact on growth yet," said Kong Dong-Pak, an analyst⁴ at Hanwha Securities.

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