Seoul: The Republic of Korea’s economy unexpectedly slowed in the second quarter on softer private consumption and business investments, reinforcing expectations for a rate cut, but the central bank brushed off any excessive concern about the latest retreat and kept high expectations for a 2.5% growth this year.

Gross domestic product in Asia’s fourth-largest economy grew 2.3% year-over-year in the April-June period, the Bank of Korea’s preliminary data showed today.

Against the prior quarter, the economy contracted 0.2%, a reversal from the first quarter’s 1.3% expansion.

The latest reading suggests that the Korean economy expanded 2.8% on-year during the first six months of this year, a tad below the central bank’s earlier forecast of a 2.9% growth.

“If the country’s economy grows 2.2% in the second half as expected, the country is expected to achieve a growth of 2.5% this year,” meeting the central bank’s earlier forecast made in May, said Shin Seung-chul, director general of the Economic Statistics Department at the Bank of Korea.

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