Seoul: The central bank on Thursday raised its economic growth forecast for South Korea to 0.9 percent for this year amid signs of a recovery in consumption and eased uncertainties surrounding the United States' tariff scheme. The revision by the Bank of Korea (BOK) marks a 0.1 percentage-point increase from its previous forecast of 0.8 percent issued in May.
According to Yonhap News Agency, the adjustment came amid signs of a recovery in private consumption, partly fueled by the government's supplementary budget and the recent conclusion of a tariff deal with the U.S., which experts say helped avert the worst-case scenario for South Korea. The revised outlook is on par with an earlier projection made by the government.
The International Monetary Fund (IMF) presented a bleaker outlook of a 0.8 percent growth for South Korea this year, while the Organization for Economic Cooperation and Development (OECD) has projected a growth rate of 1 percent. Presenting a slightly more optimistic outlook, the BOK kept the key interest rate unchanged at 2.5 percent, remaining vigilant about financial stability risks stemming from rising housing prices in Seoul and elevated household debt.