The central bank data showed construction investment grew 2.8 percent in the first quarter from the previous quarter, and facility investments rose 5.2 percent on-quarter in the first quarter.

Exports -- one of the major pillars of the South Korean economy -- advanced 4.4 percent from the last three months of 2017, while imports increased 5.5 percent.

Private consumption edged up to a four-quarter low of 0.6 percent, and government spending gained 2.5 percent over the cited period.

Gross domestic income rose 1.8 percent in the first quarter from the previous quarter, swinging from a 1.3 percent contraction three months earlier, the BOK said.

The BOK data also said the agriculture and fishing industry expanded 6.5 percent in the first quarter, while construction and manufacturing rose 3.3 percent and 1.9 percent, respectively. The service sector climbed 0.9 percent.

The electricity and gas supply, however, slid 5.5 percent in the first three months, due to a decline in electricity production over the same period.

The BOK earlier forecast the South Korean economy to grow 3 percent for 2018, with a 3 percent expansion in the first half with numbers moving up 2.9 percent in the second half.

"It's too early to say whether we can meet the forecast or not at this juncture. We still have three more quarters to go," Chung said. "Technically, if the economy grows some 0.77 percent to 0.82 percent in the remaining nine months, we should be able to achieve the sales target."

The BOK official said the thawing inter-Korean relations will have a positive impact on the South Korean economy through eased geopolitical risks and improved consumer sentiment.

The summit between South Korean President Moon Jae-in and North Korean leader Kim Jong-un will take place in the truce village of Panmunjom on Friday, sending hopes that it may bring peace and stability to the Korean Peninsula.

As the growth pace seems to coincide with the BOK's forecast, the market expects the central bank to seek the best timing to raise the base rate. The BOK has held the key rate at 1.5 percent for five months since it hiked the rate in November for the first time in more than six years.

Also, experts said the central bank has to consider the fact that South Korea's base rate is lower than that of the United States for the first time in more than 10 years following a rate hike by the Federal Reserve in March.

They are worried that the rate imbalance between South Korea and the US could spark an outflow of foreign capital, which accounts for over 30 percent of stock holdings in Asia's fourth-largest economy.

BOK Gov. Lee Ju-yeol has said his monetary policy will remain accommodative for a while, citing a still weak economic recovery and low inflation pressure. (Yonhap)