Page last updated at 07:40 GMT, Friday, 24 April 2009 08:40 UK

S Korea avoids entering recession

South Korean construction worker
The government's stimulus package has focused on construction

South Korea has narrowly avoided entering recession after its economy grew by 0.1% between January and March compared with the last quarter of 2008.

The growth, which followed a 5.1% fall between October and December, came as the government started spending a $37bn (£25bn) economic stimulus plan.

The central bank has also moved to lift the economy through a series of interest rate cuts since October.

However, first quarter economic output was still 4.3% lower than a year ago.

Construction spending - the key beneficiary of the government's stimulus action - rose at its fastest quarterly rate in 16 years between January and March. Domestic consumption also rose, while exports fell.

The South Korean economy was last in recession in 1998. A country is generally considered to be in recession following two consecutive quarters of economic contraction.

"The economy is in much better shape than feared earlier, and we may see a faster recovery than expected," said Kim Jae-eun, economist at Hana Daetoo Securities.



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