foreign IBs-Korean economy

SEOUL, April 2 (Yonhap) -- Foreign investment banks predict South Korea's growth rate for this year will beat the government's estimate on the back of economic stimulus measures, a report showed Tuesday.

The upbeat forecast came days after the finance ministry downgraded its growth estimate to 2.3 percent for this year from an earlier 3 percent, citing tougher economic conditions at home and abroad.

According to the report by the Korea Center for International Finance (KCIF), Nomura revised up its 2013 annual growth rate projection for South Korea to 2.7 percent from the previous 2.5 percent.

BoA-Merrill Lynch proposed a 2.6 percent expansion for Korea, saying that will likely be the market consensus for Asia's fourth-largest economy.

JP Morgan predicted Korea to grow 2.8 percent on-year this year, citing the government's measures to boost the faltering property market and the central bank's monetary easing policy.

JP Morgan noted that whether the Bank of Korea (BOK) will go ahead with another rate cut in April hinges on the country's economic indicators.

It also added that the BOK may hike the upper ceiling of lending for smaller companies, to be in step with President Park Geun-hye's policy focus on supporting smaller enterprises and the underprivileged.

Meanwhile, Standard Chartered expected that the government would put its policy priority on improving employment, leading to an increase in household income that will spur more consumption in the private sector. It estimated that Korea would advance 2.5 percent this year, according to the KCIF.

<All rights reserved by Yonhap News Agency>