BOK expected to raise 2021 growth forecast to 4%

The Bank of Korea (BOK) may raise its 2021 growth forecast to around 4 percent due to strong economic recovery signs amid an aggressive fiscal stimulus, according to economists.

In February, the BOK forecast South Korea's economy to grow 3 percent this year.

South Korea's economy has so far shown signs of gaining pace, helped by strong exports, which jumped 41.1 percent in April from a year earlier, extending their gains for the sixth month.

Exports account for about half of South Korea's gross domestic product.

Exports reached $51.1 billion last month, increasing from $36.2 billion a year earlier.

In the first 20 days of May, exports soared 53.3 percent on-year on the back of robust demand for chips and automobiles.

Seoul National University's Kim So-young and Yonsei University's Sung Tae-yoon, both economics professors, expect the BOK to raise this year's growth forecast to some 4 percent helped by aggressive fiscal spending, loose monetary policy, and global economic recovery.

The Korea Institute of Finance (KIF) forecast the Korean economy to grow 4.1 percent this year, up 1.2 percentage points from its previous estimate, while JP Morgan had revised its forecast for Korea to 4.6 percent from 4.1 percent.

South Korea's economy grew 1.6 percent in the January-March period from three months earlier, accelerating from a 1.2 percent on-quarter gain in the fourth quarter of last year.