S. Korean IIQ growth better than forecast

South Korea's economy grew 0.9 percent in the second quarter from the first quarter, faster than the estimated 0.8 percent, the central bank said Tuesday. The Bank of Korea said the improvement in the gross domestic product was largely the result of better-than-expected construction investment, which helped offset slower exports, Yonhap News reported. It was the 10th straight quarterly positive growth. Analysts told Yonhap the outlook appears weak, as exports -- which account for about half of the country's GDP -- could be hit by a global economic slowdown. The central bank, however, said despite the worsening external factors, the growth momentum is likely to remain largely intact in the coming quarters. "In the second quarter, the economic growth was led by domestic demand," Jung Young-taek, director of the bank's national accounts division, told reporters. "External economic conditions worsened, but for now, there are not enough downside factors to lower the growth estimate for the third and fourth quarters." The forecast is for a 1.5 percent growth in each of the next two quarters. Analysts expect the bank to keep its key interest rate unchanged at 3.25 percent for the third straight month despite inflationary pressures.