South Korea's economic output grew by 1.4% in the quarter, the Bank of Korea said.

In the first three months of this year, expansion hit 1.9%.

Analysts said the easing in growth reflected slowdowns in consumer spending and rates of investment in construction projects, such as facilities for football's World Cup.

Shoppers ease off

The country's credit card-fuelled retail boom continued, but shoppers appear to have reined in their spending.

Consumer spending rose 7.7% for the quarter, compared with a rise of 8.4% in the first three months of the year, the Bank of Korea said.

South Korea's economy, which is driven by hi-tech exports, particularly to the US, has recovered from its doldrums last year.

Fears for US trade

On annual basis, economic growth hit 6.3% in the April to June period.

Manufacturing output rose by 6.4%, while the service sector powered ahead by 8.4%, Thursday's data showed.

However, with the pace of economic recovery in the US more uncertain, and the won appreciating against the US dollar analysts expressed concern about North Korea's prospects for the remainder of the year.

"We had expected exports to drive economic growth in the second half [of 2002]," said Kim Giseung of LG Economic Research Institute.

"But now we have to worry about a strong won and the pace of the US economy recovery."

The won has risen by 9% against the dollar so far this year.

But South Korea's central bank said it was sticking to its forecast of economic growth of at least 6% over 2002.

"Investment is expected to recover in the second half, given fast recovering exports," said Cho Sung-Jong, the head of the Bank's statistics office.

Growth of 6% was achievable "even in the worst case scenario", he said.

Last year, South Korea managed to avoid the recession that struck other East Asian countries such as Japan, Taiwan and Singapore.