Bank of Korea raises growth forecast to 5.9%

We are understanding this Bank of Korea raises growth forecast to 5.9%

Seoul: South Korea's central bank raised its forecast for the country's economic growth this year to 5.9 per cent on solid exports as well as capital and consumer spending amid a stronger global recovery.
The Bank of Korea, which had previously expected an expansion of 5.2 per cent in 2010, made the revision yesterday in a report on the economic outlook for the second half of the year.
"Goods exports and facilities investment are forecast to maintain strong growth owing to stronger recovery of the global economy, favourable IT industry and demand for changes in production facilities," the bank said.
Consumer spending, meanwhile, will get a boost from higher household purchasing power, it added.
The brighter assessment comes after the South Korean government last month raised its forecast to 5.8 per cent from 5 per cent.
More recently, the International Monetary Fund last week said the economy would expand 5.75 per cent this year, compared with its previous forecast of 4.5 per cent.
South Korea's economy, Asia's fourth-largest, has recovered strongly after contracting during the global financial meltdown, boosted by exports, government stimulus and record low interest rates.
It managed growth of just 0.2 per cent last year.
The robust recovery and inflation worries, however, pushed the Bank of Korea to raise its benchmark borrowing cost to 2.25 per cent on Friday from 2 per cent, the record low where it had been since February 2009. The hike came earlier than expected.
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