The assessment is in line with South Korea's growth outlook for 2017. In July, South Korea raised its target growth to 3 percent from 2.6 percent, citing export-led growth.
She said the South Korean economy could also expand 3 percent growth in 2018.
"I believe the Korean economy is extremely resilient and has demonstrated resilience in the face of adversity," Lagarde, wearing a red outfit, said in a news conference in the press center in Seoul
She made the comments amid heightened tensions on the Korean Peninsula over North Korea's sixth and most powerful nuclear test earlier this month.
|IMF chief Christine Lagarde (AP-Yonhap)|
The United Nations Security Council is likely to vote this week on further tightening sanctions on North Korea, a move that has prompted Pyongyang to warn that the US will suffer the "greatest pain" if it pushes ahead with the tougher U.N. sanctions.
Lagarde -- who visited the Demilitarized Zone that separates South and North Korea -- said she sees every downside in the escalation of the tensions, and every upside in trying to resolve those tensions and trying to re-establish certainty rather than uncertainty.
"I am confident that the economy will stand and hopeful that the situation will be resolved in a positive way," Lagarde said.
She also said the South Korean economy has the space to target the medium-term challenges of the financial safety net of the elderly people, and of the women's contribution to the economy, saying that Seoul can significantly improve on facilitating the access of women and young people to the job market.
South Korea has taken a series of steps in recent years to try to bring stay-at-home moms back to work.
About half of South Korean women at work quit their jobs in 2016 due mainly to marriage, pregnancy and childbirth, according to the government. South Korea's female labor participation is among the lowest in the world, as many women leave work to raise children.
"We believe that by combining integration of women, innovation, having a fair competition playing field, very, very good developments can occur in the Korean economy. So we are overall optimistic about the future of the Korean economy in spite of the external threats that it addresses with your resilience," Lagarde said.
She also said a hike in the minimum wage could make people spend more and kick-start additional consumption.
"It's going to rebalance the growth model towards that," she said.
Still, she said that "you need to be balanced and cautious and move reasonably and in accordance with the pace of the economy as well," citing her experience as the former French finance minister.
"There's a good saying in ancient Greek, which is 'Haste slowly.' So, change, yes, but measure such change so that they can effectively be efficient and not lead to exclusion."
In July, a tripartite commission of the South Korean government, labor and management reached an agreement to increase the minimum hourly wage to 7,530 won ($6.68) in 2018, up 16.4 percent from the current 6,470 won. (Yonhap)