Japanese bank Nomura Holdings joined several global investment banks on Friday in raising South Korea's economic growth forecast for this year.
Kwon Young-sun, a chief economist at Nomura, upgraded South Korea's economic growth rate for this year to 2.7 percent from its previous forecast of 2.4 percent, citing improving exports and construction investment.
However, South Korea's economy is likely to show signs of mild growth in the second half of this year.
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(Yonhap) |
Kwon noted that South Korea's economy has been suffering from China's retaliatory measures against the deployment of an advanced US anti-missile system in South Korea. North Korea's pursuit of nuclear weapons and ballistic missiles is also weighing on the South Korean economy, Kwon said.
The Bank of Korea, which upgraded its growth forecast for the country to 2.6 percent in April, has kept its key interest rate at a record low of 1.25 percent.
Kwon expected the South Korean central bank to raise its key rate by 0.25 percent during the second half of next year.
South Korea's main stock market reported its seventh consecutive month of gains at the end of last month.
The Korea Composite Stock Price Index broke through the 2,400-point level for the first time during intra-day trading on June 29.
Nomura expected the KOSPI to test the 2,600-point level by the end of this year, saying that this year's combined net profit of KOSPI-listed firms is predicted to rise 46 percent on year. (Yonhap)
