South Korea, Asia’s fourth-largest economy, grew at the fastest clip in nearly a year thanks to a recovery in exports, the central bank said Thursday, despite a backlash from Chinese consumers over the deployment of a U.S. missile defense system.
The economy expanded 2.7 percent during the January-March period over a year earlier, higher than the 2.4 percent growth during the previous quarter and the strongest since the second quarter, Bank of Korea said in its preliminary results.
On a quarterly basis, South Korea’s economy grew 0.9 percent, after posting 0.5 percent quarterly growth in the last two quarters.
The bank said the result, slightly higher than expectations, was thanks to recovery in exports.
Since late February, South Korea has seen backlashes from China, its biggest trading partner, after the government signed an agreement with Lotte Group to use its golf course to deploy the advanced U.S. missile defense system known as THAAD. As the Chinese government publicly opposed the missile defense, the number of Chinese tourists visiting South Korea withered and sales of South Korean cosmetics, cars and other products in China dropped.
But the latest growth figure showed that some exporters, especially semiconductor makers, had a great quarter defying what many South Koreans saw as China’s revenge over THAAD.
Samsung Electronics, the world’s largest memory chipmaker, announced its best quarterly result in nearly three years, and SK Hynix also reported the highest quarterly profit in its history. Semiconductor companies also increased their capital expenditures for their future production, contributing to South Korea’s economic growth during the first three months.
Bank of Korea last month revised its growth forecast to 2.8 percent this year, up from 2.7 percent, citing that the better-than-expected manufacturing sector.