SEOUL, April 25 Reuters The South Korean economy grew at the fastest pace in more than two years in the first quarter beating all estimates with a pickup in domestic consumption and robust exports, but the market questioned if the recovery was sustainable.

Gross domestic product GDP for the JanuaryMarch quarter was 1.3 higher than the preceding three months on a seasonally adjusted basis, the sharpest expansion since the fourth quarter of 2021, data from the Bank of Korea BOK showed.

That comes after an expansion of 0.6 in the prior quarter and compares with a median forecast of 0.6 in a Reuters survey of economists.

Growth in domestic demand was the main factor underpinning the strongerthanexpected GDP, said Shivaan Tandon, an economist at Capital Economics, referring to a 0.8 gain in private consumption after a 0.2 increase three months earlier.

The data offer encouraging signs that the worst might be over for consumption in Korea but with the labour market weakening and debt service burdens likely to remain high, we arent convinced that todays data mark the start of a strong recovery, he said in a report.

On an annual basis, Asia39;s fourthlargest economy grew 3.4, compared with a gain of 2.2 in the fourth quarter of 2023 and an increase of 2.4 expected by economists.

The central bank said at its last rate decision meeting that there was a possibility the economy would grow at a faster pace in 2024 than its earlier projection of 2.1. In 2023, the economy grew…