SEOUL, May 22 (Xinhua) -- The Organization for Economic Cooperation and Development (OECD) lowered on Tuesday its 2012 economic growth outlook for South Korea to 3.3 percent from an earlier estimate of 3.5 percent amid lingering uncertainties at home and abroad.
The OECD revised down its outlook for the country's 2012 gross domestic product (GDP) growth to 3.3 percent from 3.5 percent estimated a month earlier, according to the OECD Economic Outlook report cited by the Ministry of Strategy and Finance.
The outlook downgrade came after local think tanks and the country's central bank lowered their growth outlook recently. The state-run Korea Development Institute (KDI) lowered on Sunday its 2012 growth outlook from 3.8 percent to 3.6 percent, while the Korea Institute of Finance (KIF) cut its outlook for 2012 from 3.7 percent to 3.4 percent. The Bank of Korea (BOK) lowered its 2012 outlook from 3.7 percent to 3.5 percent last month.
The expected weakening of the global economy stemming from deterioration in the euro area was cited by the OECD as a major external risk factor to the South Korean economy.
The organization warned that there was considerable uncertainty about growth in China, South Korea's major trading partner, noting that rising oil prices may threaten the economy given the country is the world's fifth largest oil importer.
On the domestic front, household debt was picked as a threat to the South Korean economy. The nation's household debts reached 135 percent of household income in 2011.
The OECD expected the country's economic growth to accelerate in 2013 due to solid export growth. The outlook for 2013 economic growth was cut to 4 percent from 4.3 percent estimated by the organization a month before.
"Export growth is projected to gain momentum as world trade picks up in 2012. Trade will also be stimulated by the front- loaded implementation of the Korea-US Free Trade Agreement beginning in 2012," the OECD said in a report.
The organization noted that stronger exports, which account for around half of the economy, will likely boost fixed investment and support private consumption.
Meanwhile, the OECD advised the BOK to raise its policy rate from the current level of 3.25 percent to keep inflation near the mid-point of its 2-4 percent target range.
The organization lowered its outlook for the nation's 2012 consumer price inflation to 3 percent from an earlier estimate of 3.4 percent, while leaving the 2013 outlook unchanged at 3 percent.