Korea’s economic growth slowed to 0.4 percent on-quarter in the first three months of 2016, equal to the level reported during last year’s deadly outbreak of Middle East respiratory syndrome.

Gross domestic product in the January-March period came in at a seasonally- adjusted 371.8 trillion won, up 0.4 percent from the three months before, preliminary estimates from the Bank of Korea show. 

That is a slowdown from a 0.7 percent expansion in the previous quarter and a return to the level registered in the second quarter of 2015, when the economy was in the grips of the virus.

From a year earlier, the Q1 estimate marks a growth of 2.7 percent.

“Contractions in exports and domestic consumption dragged down the economy,” said Hana Financial Investment analyst Soh Jae-yong.

If not for the government’s front-loaded fiscal spending, the economy’s first-quarter results would have been worse, he pointed out. The fiscal expenditures bolstered GDP by 0.2 percentage point, the BOK data show.

The central bank, while keeping the base interest rate at a record low since June last year, last week slashed its forecast for full-year growth to 2.8 percent. The Finance Ministry is sticking to its December projection of 3.1 percent GDP expansion this year. Private forecasters see growth of the mid-2 percent range.

The Finance Ministry on Tuesday said growth would likely accelerate in the second quarter, adding that January was a particularly tough month for the economy.

“February and March showed signs of improvement,” a ministry official pointed out.

Broken down, domestic consumption edged up just 0.1 percent from three months earlier, while exports shrank 1.7 percent, the BOK data show.

Domestic gross income, on the other hand, grew 2.8 percent from the previous quarter, quickening from a 0.7 percent rise three months earlier, the BOK said.

By Lee Sun-young (milaya@heraldcorp.com)