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Freight containers fill a port in Busan. (Yonhap)

Preliminary data released by the Bank of Korea on Thursday indicates that the country’s real economic growth in the first quarter was 1.3%, which was higher than expected.

The presidential office and the Ministry of Economy and Finance immediately offered hopeful predictions that Korea has fully entered an economic recovery path led by the private sector.

“This is a clear ‘green light’ to a growth trajectory for our economy,” Korea’s Ministry of Economy and Finance remarked.

It’s highly unusual for both the presidential office and a government ministry to hold separate briefings about economic growth estimates by the Bank of Korea. Some pundits think that the press conferences were prompted by the opposition party’s request for a 13 trillion supplementary budget aimed at boosting public livelihood.

Sung Tae-yoon, the head of policy for the presidential office, said in a press conference Thursday that the first-quarter economic growth rate was a “surprise, in quantitative terms, but in terms of its content, it can be seen as a return to a dynamic growth trajectory led by the private sector.”

The private sector accounted for all 1.3 points of growth in the first quarter, with no growth resulting from public spending or investments.

“There may be some temporary volatility, but if the recovery in domestic demand gradually expands alongside improving imports, some degree of sustained growth will be feasible. I think we’ll surpass the initial projections of a 2.2% [growth rate for the year],” Sung said.

The Ministry of Economy and Finance also held a press conference on Thursday after releasing a written statement about the growth indicators for the first quarter.

“This is a clear ‘green light’ to a growth trajectory for our economy,” the Ministry said, welcoming the central bank’s preliminary data. “This is a textbook return to a growth track.”

This is the first time the Ministry of Economy and Finance has held a separate briefing on the very day the Bank of Korea released preliminary data about the economic growth rate.

Yoon In-dae, the head of the economic policy bureau at the Ministry of Economy and Finance, said the Korean economy “is now in a full-blown rebound.”

“It’s significant that much of the growth was driven by the private sector, without a major contribution from government spending. What that means is growth is sustainable,” Yoon said.

But Yoon said he doesn’t think the preliminary data being higher than expected will lead directly to improvements in Koreans’ standard of living.

“We’re well aware that people’s financial situation remains tight. We’ll be working to ensure that the export-driven strong indicators for the economy as a whole will trickle down to ordinary consumers,” he said.

After the presidential office and the Ministry of Economy and Finance adopted such an optimistic stance on future economic trends, some think the government hopes to use the surprisingly strong first quarter figures as grounds for resisting the opposition party’s push for each citizen to be paid 250,000 won as an economic stimulus and for 13 trillion won to be allocated for a supplementary budget.

When a reporter asked about the government’s stance on the proposed stimulus payouts, Yoon obliquely opposed the idea, noting that Korea “probably won’t be in an economic recession anymore.”

Ha Joon-kyung, a professor of economics at Hanyang University, responded to the government’s emphasis on a “growth trajectory led by the private sector.”

“Just because the government didn’t make a major contribution to growth is no reason to assume that the domestic economy will make a full recovery. When Korea’s economic growth is lower than its potential growth rate, I don’t think the government’s failure to drive growth is anything to brag about,” he said.

“It seems a little hasty to conclude from the first quarter figures that the economy has fully entered a recovery phase,” noted Joo Won, the head of economic research at the Hyundai Research Institute.

By Ahn Tae-ho, staff reporter; Seong Yeon-cheol, staff reporter

Please direct questions or comments to [english@hani.co.kr]