12 July 2010 | By: Charmaine Tan

The central bank of South Korea revised its 2010 economic growth forecast to a high of 5.9 per cent, with growth in industrial output, exports and business investments leading the way ahead.

This is compared to an earlier estimate of 5.2 per cent in April. The revised forecast is the highest in eight years, since the 7.2 per cent actual growth in 2002.

The central bank is optimistic about its economy and expects the upward trend to continue into the next year.

The economy grew 1.2 per cent in the second quarter. However, the bank expects that in this may fall to 0.7 per cent quarter-on-quarter, in the third quarter.

Earlier, the International Monetary Fund (IMF) revised its growth forecast for the Korean economy up from 4.5 per cent to 5.75 per cent this year and 5.0 per cent next year.

It said that the revised figures highlighted Korea’s rapid recovery from the global economic crisis due to supportive macroeconomic and financial policies, and the regulation of global trade.

The figures for job growth have also been revised upwards, with the expected number of employed people this year to increase by 330,000 up from an earlier estimate of 240.000.

For the export-dependent Korean economy, the IMF suggested that South Korea maintain a flexible exchange rate and reducing its dependence on trading to reduce its vulnerability to global downturns.