South Korea's central bank said on Thursday that the country's economy in 2021 will expand faster than its previous forecast of 3-percent GDP growth.
"Growth around the mid-3-percent mark is easily possible considering the current recovery trend of the global and domestic economy. There has been a large scale stimulus package in the U.S. followed by a global economic rebound, and domestic exports as well as facility investment are also expanding faster than previously expected."
Bank of Korea Governor Lee Ju-yeol added that the improvement in private consumption followed by eased social distancing restrictions is another sign of the recovery of the domestic economy.
The projection comes as the country is seeing an increase in new COVID-19 cases the daily tally reaching around 700 while the vaccine rollout is making slow progress.
Behind the confident forecast is the assumption that the nation's COVID-19 situation will not get significantly worse than the current level.
But given that there is still much uncertainty, the central bank on Thursday once again froze its benchmark interest rate at a record low of point-five percent for the seventh straight time.
The bank aims to continue with its expansionary policy until the current economic recovery takes root, while keeping a close look at how the COVID-19 situation unfolds.
Last year, the country's central bank cut its key interest rate twice to point-seven-five percent in March and once more to a record-low point-five percent just two months later in May.
Kim Sung-min, Arirang News