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IMF keeps Korea's 2017 growth rate unchanged at 2.7%

The International Monetary Fund kept its forecast for South Korea's economic growth for this year on hold at 2.7 percent, despite signs of a recovery in the country's exports.

The projection by the IMF is slightly higher than a 2.6 percent growth forecast by the Bank of Korea. South Korea's economy grew 2.8 percent last year. 

(Yonhap)
(Yonhap)

In a report, the IMF cited "political uncertainty" stemming from the ouster of former President Park Geun-hye over a corruption and influence-peddling scandal as the key factor that can cause South Korea's economy to be subdued.

"In Korea, growth was 2.8 percent in 2016, mainly driven by stronger construction investment, while private consumption was weaker than expected, reflecting political uncertainties," the IMF said in the report.

The Washington-based fund said South Korea's economic growth "is expected to increase to 2.8 percent in 2018."

"Lower consumption will weigh on growth, reflecting heightened uncertainty amid political turmoil," it said.

Last month, South Korea's central bank raised its growth outlook from its previous estimate of 2.5 percent for this year.

The upward revision came as the global economic recovery helped the country's shipments and facility investment.

South Korea's exports gained 1.9 percent in the first quarter from a quarter earlier.

The nation's facility investment grew 4.3 percent quarter-over-quarter in the January-March period, according to the central bank. (Yonhap)

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