SEOUL, July 13 (Xinhua) -- South Korea's central bank on Thursday raised its 2017 growth forecast for the economy to reflect the altered economic situations at home and abroad.
Bank of Korea (BOK) Governor Lee Ju-yeol announced the upward revision following a rate-setting meeting where Lee and other monetary policy board members decided unanimously to freeze the benchmark rate at an all-time low of 1.25 percent. The rate was lowered to the current level in June last year.
The BOK's growth outlook for this year was revised up to 2.8 percent from 2.6 percent unveiled three months earlier. In April, the bank's forecast was revised up by 0.1 percentage point.
The BOK's upgraded outlook was higher than the figures disclosed by local economic think tanks that ranged from 2.5 percent to 2.6 percent. The government's outlook was 2.6 percent.
The upward revision reflected recovering exports, which posted a double-digit increase for six months through June. Exports account for about half of the Asia's No.4 economy.
Governor Lee told reporters that the exports grew at a steep pace despite the lackluster consumption expansion, predicting a solid growth trend in the future amid lingering uncertainties of the country's major trading partners as well as geopolitical risks.
Earlier this month, the Democratic People's Republic of Korea (DPRK) test-fired what it claimed an intercontinental ballistic missile (ICBM) that flew about 930 km and was lofted as high as 2,800 km.
It rattled the South Korean stock market following the DPRK announcement of the successful ICBM test-launch, but local shares rebounded, posting a new record closing high in recent sessions.
The top central banker said the upgraded growth outlook did not reflect the government's supplementary budget plan to create decent jobs, which had been blocked by conservative opposition parties from being passed through the National Assembly.
If implemented, the government expected the budget plan to raise the country's gross domestic product (GDP) by 0.2 percentage points this year.
The GDP growth rate was 3.3 percent in 2014, before falling to 2.8 percent both in 2015 and 2016.
The BOK set its consumer price inflation outlook at 1.9 percent, unchanged compared with three months earlier.
The central bank said the falling number of Chinese tourists visiting South Korea would drag down the GDP expansion by 0.3 percentage points in 2017.
Private consumption was forecast to rise 2.0 percent in the first half and 2.4 percent in the second half respectively, while growth outlooks for facility investment were set at 14.1 percent in the first half and 5.0 percent in the second half each.
Growth of construction investment was predicted by the BOK to slow from 9.9 percent in the first half to 3.7 percent in the second half.
Exports and imports were predicted to grow 2.7 percent and 3.2 percent each in the second half of this year.
