The South Korean economy unexpected expanded by 0.1 percent in the first quarter of 2008 compared to the previous three months, the central bank said on Friday in an advanced reading, possibly averting a technical recession.

Analysts had been expecting a 0.8 percent quarterly decline following the 5.6 percent fall in the previous three months.

On an annual basis, gross domestic product fell 4.3 percent versus forecasts for a 4.6 percent decline after the 3.4 percent contraction in the fourth quarter of 2008.

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