IMF upgrades Korea's economic growth outlook to 3.2% this year

The International Monetary Fund said Tuesday that it has revised up its growth outlook for South Korea's economy this year to 3.2 percent.

The upward revision came a month after the IMF adjusted South Korea's gross domestic product growth to 3 percent.

"The cyclical recovery is expected to continue. GDP growth is projected at 3.2 percent in 2017 as the momentum in the first three quarters continues," the IMF said in a statement after wrapping up a visit to Seoul by its officials.

(Yonhap)

The IMF also said growth is forecast at around 3.0 percent in 2018, with private consumption growth benefiting from the large minimum wage increase and from policies supporting employment and social spending.

Separately, the IMF said South Korea's central bank should maintain its accommodative monetary stance, noting inflationary pressures are weak and the output gap is negative, with large uncertainty surrounding the estimates.

The Bank of Korea is set to hold its rate review session on Nov. 30 to decide whether to keep or adjust the all-time low rate of 1.25 percent.

In October, the BOK kept its policy rate at that record-low level, extending its wait-and-see approach for the 16th consecutive month.

The central bank has said "conditions are gradually being created" for tightening its monetary easing stance, but it will monitor whether the trend of improved economic conditions is steady and can be sustained amid uncertainties such as geopolitical risks and trade-related developments with major countries. (Yonhap)