S. Korea's central bank revises up 2017 economic growth outlook to 3 pct

Source: Xinhua| 2017-10-19 14:47:06|Editor: liuxin
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SEOUL, Oct. 19 (Xinhua) -- South Korea's central bank on Thursday raised its 2017 growth outlook for the economy by 0.2 percentage points to 3 percent on robust exports and investment.

The Bank of Korea (BOK) said in a statement that its growth forecast for this year was revised up to 3 percent from 2.8 percent estimated three months earlier.

Next year's growth outlook was set at 2.9 percent, roughly in a range of the economy's potential growth rate.

Outlook for this year's consumer price inflation was increased from 1.9 percent to 2 percent.

The BOK's revised 2017 growth forecast was the same as the estimates by the finance ministry and the International Monetary Fund (IMF). It was higher than a range of 2.6-2.8 percent estimated by local economic think tanks.

The central bank revised up its growth outlook three times this year, after raising it by 0.1 percentage point in April and by 0.2 percentage points in July.

South Korea's real gross domestic product (GDP) grew at an annualized rate of 3.3 percent in 2014, before rising at an identical rate of 2.8 percent in 2015 and 2016.

The bank said the upward revision reflected the continued recovery in exports and facility investment as well as the modest recovery in private consumption.

It expected the global economy to keep recovering next year amid the government's fiscal spending that may speed up the private consumption recovery.

According to the Ministry of Trade, Industry and Energy data, the country's exports hit a new monthly high of 55.13 billion U.S. dollars in September thanks to strong demand for locally-made semiconductors.

The exports continued to rise for 11 months through September, maintaining a double-digit expansion for the ninth straight month.

The National Assembly passed a supplementary budget worth 11 trillion won (about 10 billion U.S. dollars) in July, which would be implemented in the second half to create jobs.

Reflecting the upbeat economic outlook, the BOK indicated a rate increase, possibly within this year. BOK Governor Lee Ju-yeol told reporters after the October rate-setting meeting that conditions got mature more or less to lessen the current accommodative monetary policy.

Governor Lee and six other policy board members decided to freeze the benchmark interest rate at an all-time low of 1.25 percent, refraining from altering the rate for 16 months in a row.

However, one policy board member claimed a quarter-percentage-point rate hike, heralding a tightened monetary stance in the foreseeable future.

The BOK forecast the country's exports would increase 3.7 percent this year, 1.5 percentage points higher than the previous year's growth rate.

The bank's outlook for facility investment was an expansion of 14 percent in 2017, while the figure for construction investment was set at 6.9 percent.

Private consumption was projected to rise 2.3 percent this year, lower than last year's 2.5 percent increase.

The BOK cited worsened trade terms with major economies, including the United States, increased volatility in the global financial market and rising geopolitical risks on the Korean Peninsula as downside risk factors faced with the South Korea economy.

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