Roundup: S.Korea's Q1 GDP revised up to 0.5 percent amid rising rate cut expectations

South Korea's first-quarter gross domestic product (GDP) was revised up to 0.5 percent, but it was the lowest growth in three quarters, central bank data showed on Thursday.

The first-quarter GDP was revised at 372.37 trillion won (312.29 billion U.S. dollars), up 0.5 percent from the previous quarter, according to the Bank of Korea (BOK). It was revised up from a 0.4 percent increase announced in April.

Despite the upward revision, the first-quarter growth was the lowest since the second quarter of last year when it recorded a 0.4 percent expansion due to lackluster private consumption caused by the outbreak of the Middle East Respiratory Syndrome (MERS).

South Korea's economic growth stayed below 1 percent for seven straight quarters except for the third quarter of last year when the GDP increased 1.2 percent due to fiscal and monetary stimulus.

The central bank was expected to cut its benchmark interest rate further from an all-time low of 1.5 percent amid rising concerns about the prolonged low growth trend.

According to the BOK minutes for the May monetary policy meeting, one of the seven board members expressed the need for rate cut in the near future.

Among the seven members, four were replaced to join the monthly rate-setting meeting. Half of the four new members are reportedly dovish in monetary policy, focusing on economic growth rather than controlling inflation.

One policymaker said the government-led corporate restructuring would increase downward pressures on the South Korean economy, according to the May minutes. Another policymaker said credit crunch could happen if the restructuring process goes on.

The government has been pushing a corporate restructuring in shipping and shipbuilding industries that had suffered from massive losses and falling orders amid the global economic slowdown.

According to the GDP data, South Korea's investment, private consumption and exports all showed a dimmer picture in the first quarter, bolstering concerns about the prolongation of low growth.

Facility investment tumbled 7.1 percent in the first quarter from three months earlier, marking the first reduction in two years. It was the lowest since the second quarter of 2012.

As economic uncertainties increase at home, local companies turned their eye to overseas investment. Local firms' overseas investment hit the highest in nearly 18 years in the first quarter.

Private consumption fell 0.2 percent due to weak demand for cars, communication devices and clothing. Savings rate posted the highest in a year as consumers refrained from consumption. Exports, which account for about half of the export-driven economy, declined 1.1 percent in the first quarter due to lower crude oil prices and economic slowdown in China, South Korea's largest trading partner.

Consumer prices rose 0.8 percent in May from a year earlier, falling below 1 percent for the first time in four months.

Overall industrial production slumped 0.8 percent in April from the previous month, marking the first fall in three months. The factory utilization rate among manufacturers posted 71.0 percent in April, the lowest since March 2009.

Current account surplus stood at 3.37 billion U.S. dollars in April, the lowest in more than two years and down from a 10.09 billion-dollar surplus in March. Enditem