SEOUL, Jan. 24 (Korea Bizwire) – Global rating agency Standard & Poor’s said Wednesday it has raised the outlook for South Korea’s growth rate to 2.8 percent this year from its previous forecast of 2.55 percent, citing the global economic recovery and rising exports of South Korean goods.
The Bank of Korea (BOK) said last week that South Korea’s gross domestic product (GDP) will grow 3 percent in 2018, faster than its previous estimate of 2.9 percent, on expectations of continued domestic demand recovery and robust export growth.
Speaking during a press conference at a Seoul hotel, Paul Gruenwald, chief Asia-Pacific economist at S&P Global Ratings, said export-oriented countries like South Korea should benefit the most from the global economic recovery.
Gruenwald put South Korea’s growth rate at 3.2 percent for the first quarter of this year.
South Korea will be able to maintain its growth rate while carefully managing ongoing negotiations on the revision of the Korea-U.S. free trade agreement, he said, adding that U.S. President Donald Trump’s protectionist movement will likely serve as a downside risk.
Kim Eng Tan, S&P’s Asia-Pacific senior director of sovereign ratings, said the upcoming PyeongChang Winter Olympics in South Korea will have a substantial impact on South Korea’s sovereign rating on a short-term basis, adding that any improvement in inter-Korean ties will reduce the geopolitical risks that affect South Korea’s ratings.