The South Korean economy grew 1.4 percent in the first quarter from three months earlier on sustained exports and improving domestic demand, the central bank said Wednesday.

The first-quarter growth accelerated from a 0.5 percent on-quarter expansion seen in the fourth quarter of last year, according to an advance estimate by the Bank of Korea (BOK). The country's gross domestic product (GDP), the broadest measure of economic performance, jumped 4.2 percent last quarter from a year ago.

The quarterly growth rate was lower than a 1.5 percent expansion estimated by the central bank on April 13, but the on-year growth was better than an earlier projection of 4.1 percent.

 Asia's fourth-largest economy has logged positive growth for ninth straight quarters, indicating that the local economy is on a solid growth track, raising risks of growing inflationary pressure.

 The global economy is recovering at an uneven pace. Advanced economies are undergoing fragile recoveries while emerging countries are growing solidly amid risks of higher inflation and asset bubbles.

The BOK maintained its 2011 growth forecast at 4.5 percent, but revised up the inflation projection to 3.9 percent this year from an earlier forecast of 3.5 percent.

The continued economic growth and rising oil and commodity prices are forecast to put upward pressure on inflation down the road. The BOK said it will take baby steps toward policy tightening, raising prospects that the bank will likely deliver a rate hike to 3.25 percent as early as May.

Exports, which account for about 50 percent of South Korea's GDP, gained 3.3 percent on-quarter in the first quarter after expanding 2.6 percent three months earlier.

Private spending, one of the main growth engines of the Korean economy, expanded 0.5 percent, quickening from a 0.3 percent gain in the preceding quarter.

Facility investment contracted 0.8 percent after falling 1 percent in the preceding quarter and construction investment tumbled 6.7 percent after declining 1 percent in the fourth quarter.

The manufacturing industry continued its expansion by growing 3.2 percent on-quarter in the January-March period. But the agricultural sector declined 5.1 percent due to the impact of foot-and-mouth disease, the worst performance since 14.7 percent contraction in the first quarter of 1990.

The BOK said oil and vegetable prices, the main drivers of inflation, are widely expected to ease starting in the third quarter, but the underlying upward trend of inflation will continue into next year.

BOK Gov. Kim Choong-soo said that the country's consumer price growth would slow this month to around 4 percent after rising 4.7 percent in March from a year ago. Consumer inflation exceeded the upper ceiling of the BOK's 2-4 percent inflation target band for three months in a row last month.

The BOK has raised the borrowing costs four times from a record low of 2 percent since July last year in a bid to normalize the soft monetary policy.

(Yonhap news)