Korean economy to expand 3% in 2016: finance minister

South Korea's finance minister said Wednesday the country's economy is expected to grow 3 percent on-year in 2016, adding it boasts enough capabilities to cope with short-term uncertainties.

"South Korea is able to post 3 percent level growth as the government is rolling out measures to vitalize investment and exports, as well as structural innovations," Finance Minister Yoo Il-ho said. The South Korean government currently aims to post an on-year growth of 3.1 percent.

The International Monetary Fund (IMF) earlier lowered its forecast for South Korea's economic growth this year to 2.7 percent, as a slowdown in China has weighed heavily on Asia's fourth-largest economy.

The latest forecast is sharply down from the 3.2 percent growth the agency forecast in its World Economic Outlook report published in October last year.

Concerning the sluggish Chinese economy, Yoo said the slowed growth will have only a limited impact on South Korea.

"The transition of the Chinese economy into a sustainable one will eventually benefit the South Korean economy as well," Yoo said. "China is changing its strategy to focus on domestic consumption. This can become an opportunity. In this aspect, the free trade agreement will also help."

China is South Korea's biggest trade partner, with its exports to China accounting for more than a quarter of the country's entire outbound shipments.

Yoo added the South Korean government will also make efforts to increase trading partners to bolster its exports and economy. (Yonhap)