The International Monetary Fund has hiked its economic growth outlook for South Korea this year to three.two percent, up zero.two percentage points from last month's forecast.
"The momentum is very strong. Especially in Q3, we felt that investment growth remained stronger than what we expected; exports still performed well. And even when you adjust for all these changes in workdays and all that, still in the fourth quarter, we expect this momentum to continue, so 3.2 is quite feasible."
The findings were released Tuesday after a team from the global body paid a two-week visit to Seoul.
The IMF team also forecast a three percent growth outlook for 2018,.. backed by growth in private consumption.
"And next year, we expect the growth rate to remain around 3%, consumption is picking up, benefiting from large minimum wage increase and from policies supporting employment and social spending."
However, noting that inflationary pressures are not strong and consumption growth could be stronger, the IMF recommended South Korea's central bank should maintain its accommodative monetary stance and expansionary fiscal policy.
It added that it's urgent for Seoul to carry out labor market restructuring, including the creation of a stronger social safety net for the unemployed, while boosting workplace flexibility for regular employees.
Kim Hyo-sun, Arirang News.