South Korea’s economy gaining traction. Monetary policy to normalise?

SEOUL -- South Korea's preliminary Q1 GDP figures show that the economy is now above its pre-pandemic size. The recovery has gained momentum, helped by robust exports and a turnaround in domestic demand, with first quarter GDP coming in at +1.8% compared with - 1.2% in the fourth quarter of 2020.

Going forward, says ANZ Bank, a potential fourth virus wave poses a near-term headwind, but strong external demand and a vaccination campaign that is gaining traction and targetting herd immunity within the year "should help the South Korean economy stay the course".

ANZ says it remains of the view that South Korea will be among the region's first to normalise monetary policy. www.live.anz.com (ATI).