SEOUL, July 12 (Xinhua) -- South Korea's central bank Monday raised its forecast for the country's economic growth this year to 5.9 percent, up 0.7 percent from the previous outlook, painting a brighter picture of its domestic economy.
The Bank of Korea said in a report released on Monday that it expects the domestic economy, Asia's fourth-largest, to grow 5.9 percent this year and 4.5 percent next year on the back of the global economic recovery and the booming IT industry.
The central bank's bullish projection for this year's economic expansion is slightly above the government's estimate last month, which stands at 5.8 percent.
The bank also raised the forecast for the country's consumer prices to 2.8 percent, up from the earlier assessment of 2.6 percent. Exports will surge 16.8 percent this year, up from a previous projection of an 11.9 percent growth, it said.
The revision comes after the bank last week upped the benchmark interest rate to 2.25 percent from a record low of 2 percent, a surprising move that defied overall market expectations. The central bank, which held the key rate steady for 16 straight months in June, cited a rising inflationary pressure as a reason behind the rate hike.
Market watchers interpreted the rate decision to be a sign that the country is now seeking an exit strategy from the global economic downturn, from which South Korea has emerged in a better shape than many other major economies in the world.