The Bank of Korea raised its growth forecast for the local economy for 2018 to three percent, up a tenth-of-a-percentage point from its previous projection made in October.
"Global economic growth has accelerated in both advanced and emerging economies. Korea's domestic economy is expected to continue its solid growth on the back of strong exports and improving consumption, although investment has somewhat slowed."
The central bank lowered its consumer price projection by zero.one percentage points to 1.7 percent.
It says there are upside and downside risks for inflation.
Rising global oil prices are pushing prices up, while the Korean won's rise against the U.S. dollar to its strongest level in more than three years is starting to weigh on import costs.
With December's core inflation rate below the bank's target of two percent and household debt still growing, the BOK kept its benchmark interest rate unchanged at one-and-a-half percent Thursday.
This freeze comes after the bank's first rate hike in over six years in November.
(Korean)- ed: devin
"The rate freeze this month was widely expected. For one thing, inflationary pressure has eased, but also the bank is waiting to see what other countries do with their monetary easing policies before making a move. The fact that Governor Lee Ju-yeol's term is set to end this March was also a factor."
Experts say the central bank is likely to raise rates gradually this year, sometime in the second quarter or later, after policymakers have had more time to assess the impact of the first increase and get clearer signals on the inflation rate.
Kim Hyesung, Arirang News.