The country's net terms-of-trade index for goods reached 85.6 in the January-March period, up 0.6 percent from a year earlier, according to the Bank of Korea (BOK). The on-year growth marked the slowest increase since a 13 percent on-year fall in the fourth quarter of 2008.
Compared with three months earlier, the first-quarter figure was down from 85.9 as raw material costs increased, the central bank said.
The index is calculated by dividing the export price index by the import price index. The base year is 2005 with a benchmark index of 100.
Since Korea's trade terms hit a record low of 75.1 in the fourth quarter of 2008, they have steadily improved as the global economic downturn has eased, reviving overseas demand for Korean goods. Exports account for more than 50 percent of South Korea's economy.
Per-unit export prices rose 15.1 percent on-year in the first quarter, pushing up a narrower index to 97.7, while per-unit import prices gained 14.3 percent to 114.1. The year-earlier growth of per-unit import prices returned to positive territory for the first time since the final quarter of 2008, the BOK added.
Aided by rising export volume, the country's income terms-of-trade index advanced 23.4 percent on-year to 120.7. But the growth slowed from a 14.4 percent on-year expansion in the fourth quarter of 2009.
The index gauges how much a country could import with total export earnings.
South Korea's economy, Asia's fourth-largest, grew 1.8 percent in the first quarter from three months earlier on robust exports and improving domestic demand. The BOK upgraded its 2010 economic growth forecast to 5.2 percent from 4.6 percent.
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