RTTNews - South Korea's gross domestic product for the second quarter was upwardly revised on Thursday to reflect a pick up in consumer spending, higher investments in machinery and transport equipment and increased exports.

The Bank of Korea said the GDP grew at a pace of 2.6%, faster than a 2.3% expansion estimated initially on July 24. This is the fastest pace of growth in more than five years. In the first quarter, the economy grew 0.1%.

Private consumption climbed in the second quarter, with spending on services rising 3.6% on a quarterly basis, much faster than a 0.4% growth in the first quarter. At the same time, investment in machinery and transport equipment picked up 10.1% reversing an 11.2% drop in the first quarter.

Net exports also surged in the second quarter, with exports climbing faster than imports. Exports climbed 14.7%, in contrast to a 3.4% decline in the preceding quarter. This was partially offset by a 7.4% rise in imports, reversing a 6.2% fall in the first quarter.

Year-on-year, the GDP fell 2.2%, slower than a 2.5% drop estimated earlier and the 4.2% decline seen in the first quarter.

In its its July report, the central bank said the South Korean economy could contract 1.6% this year compared to its earlier projection for a 2.4% decline.

The upward revision to the quarterly GDP comes close on the heels of comments made by the Finance Minister Yoon Jeung-hyun on Wednesday that the GDP could grow more than initially expected in the second quarter. The minister said the expansion was to be in the range of 2.6% to 2.7% in the three months ended June.

Earlier last month, the Finance Minister said the South Korean economy was recovering faster than other nations, although uncertainties still remained. The minister had stated that the recent recovery was driven mainly by aggressive fiscal spending but uncertainties were still lingering at home and abroad.

A number of other Asian economies have also been showing improvements in their gross domestic products during the second quarter including Singapore, Thailand, Indonesia, Philippines, Hong Kong and Japan.

Meanwhile, Fitch Ratings on Wednesday upgraded South Korea's rating outlook to stable from negative, due to an improvement in the sovereign credit fundamentals compared to the 'A' peer group.

The rating agency affirmed the country's long-term foreign currency Issuer Default Rating at 'A+', the long-term local currency IDR at 'AA', the short-term IDR at 'F1' and the Country Ceiling at 'AA'.

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