South Korea is unlikely to be hit hard by a possible U.S. interest rate hike, former Federal Reserve chairman Ben Bernanke said, dismissing concerns it could spark a massive capital outflow from Asia's fourth-largest economy.

The U.S. central bank is widely expected to raise its key rate as early as June, the first time in almost a decade, as the world's No. 1 economy is showing signs of recovery. The forecast has raised concerns it could trigger a sudden outflow of capital from emerging markets, including South Korea.

"Countries like Korea, I think they're actually very well placed because this is a country that has, in general, a good policy and good institutions," Bernanke said during a financial forum held in downtown Seoul on Wednesday.

"It's not a weak or underdeveloped economy that doesn't know how to handle capital flows ... so I think that whatever problems occur will be temporary."

Bernanke, who headed the U.S. Federal Reserve from 2006 to 2014, was in Seoul to attend the forum on the global financial crisis and the South Korean economy, which was hosted by the vernacular daily Dong-A Ilbo and its cable channel affiliate Channel A.

The former Fed chief said a U.S. rate hike would be a positive signal of a "new phase of strength in the U.S. and global economy."

"Whenever (the rate hike) begins, that is good news ... it also would mean the Fed sees the global economy as strong enough, that it's not going to drag down the U.S. economy," Bernanke said.

Last month, the Bank of Korea, South Korea's central bank, expressed a similar view, saying that the South Korean economy is strong enough to weather a U.S. rate increase.

At a press conference after a monthly rate-setting meeting, BOK Gov. Lee Ju-yeol said that there is no need to immediately track the Fed's normalization, adding that the central bank will factor in South Korea's macroeconomic indicators and the Fed's policy stance.

Touching on South Korea's economic growth, Bernanke said the country should restructure its economy to cushion itself from sudden exchange rate fluctuations.

"You need to have a more diversified economy, more domestic components, more ability to move back and forth from exports and domestic production," he said. "There are limits to how much a country can grow only based on exports."

The South Korean economy has failed to pull out of a recent slowdown despite policy efforts, including three rate cuts totaling 0.75 percentage point over the last 10-month period.

Exports, the main driver of the country's economic growth, sank 8.1 percent in April from a year earlier, worsening from a 4.3 percent on-year drop in March.

A recent BOK report also forecast that the country's outbound shipments are likely to remain sluggish into the third quarter due to slowing growth in China and unfavorable exchange rate conditions.

"An advantage of (a balanced model) is that if there's a slowdown in the global market, or a movement in exchange rates that makes you less competitive, it's not a disaster because you have the ability to let the domestic demand to take up the slack from the foreign ones," Bernanke said.

His comments come amid growing pessimism that the South Korean economy is unlikely to attain its growth target this year.

Last week, the state-run Korea Development Institute downgraded its 2015 growth forecast for South Korea to 3 percent this year from an earlier estimate of 3.5 percent.

The prediction is lower than the 3.1 percent growth estimated by the Bank of Korea and much lower than the mid-3 percent range being targeted by government policymakers. The South Korean economy expanded 3.3 percent on-year in 2014. (Yonhap)