South Korea raises 2017 GDP growth forecast to 2.8% on strong exports

The Seoul city skyline at dusk.
The Seoul city skyline at dusk.PHOTO: AFP

SEOUL (AFP) - South Korea's central bank on Thursday (July 13) revised upwards its growth forecast for Asia's fourth-largest economy this year, citing strong exports.

Bank of Korea Governor Lee Ju-yeol said the bank was forecasting a 2.8 per cent rise in gross domestic growth (GDP), from its earlier projection of 2.6 per cent made in April.

It was the second increase in the projection in three months.

"Growth in domestic demand remains weak but exports have been expanding rapidly," Lee told journalists.

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Lee said there were downside risks such as trade protectionism in major trading partners such as the United States and geopolitical uncertainties over North Korea's nuclear and missile threats.

"However, the domestic economy is expected to stay on a solid growth path," he said.

South Korea enjoyed a decades-long economic boom, but expansion has slowed more recently and economic and social frustrations were among the drivers of left-leaning new President Moon Jae-In's election in May.

The central bank on Thursday also kept its key interest rate at an all-time low of 1.25 per cent.