International investment banks have revised up South Korea’s growth outlook for this year’s economy amid pickup in exports and capital investment and expectations for accelerated recovery from increased fiscal spending under the new administration of President Moon Jae-in.

According to International Finance Center on Sunday, the growth estimate for the Korean gross domestic product by 10 international investment banks including Barclays, Morgan Stanley, and Nomura averaged 2.6 percent as of April 30, upped from 2.5 percent in March.

Their outlook for next year’s growth was also bumped up from 2.5 percent to 2.6.

The consensus for inflation forecast for 2017 and 2018 was 1.9 percent, up 0.1 percentage point from the previous month.

Foreign investment banks were mostly pessimistic about the Korean economy at the beginning of the near. Nomura Securities upgraded outlook to 2.4 percent from 2.0 percent.

Pickup in capital investment on robust demand for semiconductors and other components changed them to become more upbeat about the Korean economy. Exports in April surged 24.2 percent on year to $51 billion. Facility investment in the January-March period rose 4.3 percent against the previous quarter and 14.3 percent against the year-ago period.

The GDP in the first quarter grew faster-than-expected pace of 0.9 percent from the previous quarter, accelerating from 0.5 percent on-quarter growth in the final three months of last year.

The banks also raised expectations that increased fiscal spending could add further traction to the growth momentum. The finance ministry has begun review of Moon’s campaign pledge of creating supplementary budget of over 10 trillion won ($8.83 billion) to jump-start the economy by adding public-sector jobs.

By Boo Jang-won

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]