SEOUL – South Korea’s Central Bank raised on Thursday its growth outlook for the country’s gross domestic product by 0.2 percentage points to 3 percent for 2017, owing to a boost from exports and an increase in public spending.
Bank of Korea Governor Lee Ju-yeol announced the revised forecast at a press conference after the bank’s Monetary Policy Board decided to keep its key interest rate at a record low of 1.25 percent.
In statements reported by Yonhap news agency, Lee said the upward revision was due to robust exports from Asia’s fourth-largest economy, a trend that is expected to continue until the end of the year.
Domestic demand will also recover moderately owing to an increase in fiscal spending, planned by the new South Korean government of liberal President Moon Jae-in, he added.
In July, the central bank had already increased its GDP growth outlook by another 0.2 percentage points to 2.8 percent and that same month, Moon’s government raised its growth target to 3 percent owing to strong exports.
Earlier this month, the International Monetary Fund also said South Korea was expected to post GDP growth of 3 percent, 0.3 percentage points more than its earlier estimate owing to the country’s export-driven growth.
South Korea exports reached an all-time high in September to stand at $55.1 billion, thanks to strong demand for semiconductors and steel from China and the United States, its two main trading partners.