BANK OF KOREA RAISES COUNTRY’S GROWTH FORECAST TO 4%
South Korea's central bank on Thursday sharply raised its 2021 growth outlook to 4 percent, while holding its benchmark policy rate unchanged at a record low of 0.5 percent, amid a strong rebound in exports.
Buoyed by signs of a robust recovery in exports, the Bank of Korea (BOK) raised its growth outlook to 4 percent for this year, and to 3 percent for next year, Kim Deok-hyun reported for Yonhap News Agency. The BOK's February forecast was that South Korea's economy would grow 3 percent this year.
BOK Gov. Lee Ju-yeol said the pace of economic recovery was faster than expected but more patience is necessary on monetary policy. However, Lee sounded a slightly hawkish tone when asked about the possibility of a rate hike this year, saying that such a hike "depends on the pace of recovery."
Still, Lee stopped short of saying when the BOK would begin normalizing its loose policy, saying that the BOK will prepare for "appropriately" normalizing its accommodative settings. Thursday's rate freeze decision was unanimous, Lee said, adding that the government's extra budget would boost this year's growth by 0.1 or 0.2 percentage points.