The South Korean economy grew at a slower pace than previously estimated in the first quarter as weaker domestic demand and sluggish facility investment offset robust exports, the central bank said Wednesday.

The country's gross domestic product, the broadest measure of economic performance, grew a revised 1.3 percent in the January-March period from three months earlier, down from an earlier estimate of a 1.4 percent expansion, according to the Bank of Korea (BOK).

Compared with a year earlier, Asia's fourth-largest economy expanded at the same 4.2 percent pace as earlier forecast, the bank added.

The BOK said that overseas shipments remained brisk in the first quarter, led by semiconductors and automobiles, but consumer spending and facility investment performed worse than previously estimated.

The data came two days before BOK policymakers hold a monthly rate-setting meeting amid lingering economic uncertainty. The growth data is likely to lend support to the views that the central bank may freeze the key rate at 3 percent for the third straight month on Friday.

A batch of sluggish U.S. data has ignited debate over whether the U.S. economy is in a soft patch or is heading into another economic recession. A soft patch refers to a period of economic slowdown amid a larger trend of economic growth.

Volatility of global financial markets has increased ahead of the Federal Reserve's planned end of a US$600 billion asset-buying program at the end of June. Fears about Greece's potential debt restructuring have also weighed on the global markets.

Amid economic uncertainty, South Korea is facing inflation risks as the country's consumer prices exceeded the upper ceiling of the BOK's 2-4 percent inflation target for the fifth straight month in May. Consumer inflation grew 4.1 percent on-year in May, down from 4.2 percent in April.

Exports, which account for about 50 percent of South Korea's GDP, gained 4.6 percent on-quarter in the first quarter, better than an earlier projection of a 3.3 percent expansion.

Private spending, one of the main growth engines of the Korean economy, rose 0.4 percent, compared with a previous estimate of a

0.5 percent advance.

Facility investment fell 1.1 percent, larger than a 0.8 percent contraction earlier estimated and construction investment declined. 6.7 percent, the same as earlier forecast.

The BOK maintained its 2011 growth forecast at 4.5 percent, but revised up the inflation projection to 3.9 percent this year from an earlier forecast of 3.5 percent.

The government has been targeting around 5 percent economic growth this year while containing inflation at 3 percent, but mounting inflationary pressure is making it hard for the government to attain such goals.

The Korea Development Institute (KDI), a state-run think tank, raised its 2011 inflation outlook for South Korea to 4.1 percent from its previous 3.2 percent estimate, calling for the BOK to actively lift its key rate, given growing inflation risks. (Yonhap News)