Anchor: South Korea's economy is expected to grow at a faster pace than previously expected. With both domestic and global economic conditions on the mend this year, the Bank of Korea has raised its GDP projection for the country.
Oh Soo-young has more.
 
Report: The Bank of Korea(BOK) on Thursday raised its growth forecast for the South Korean economy to three percent for this year, up point-two percentage points from its previous projection in July.
 
This puts the central bank's forecast in line with that of the government which expects the eleven-point-two billion won budget supplement to provide a boost for the domestic economy, spurring higher spending.
 
BOK officials also projected that inflation will gradually hit the target rate of two percent this year -- up zero-point-one percentage point from its July estimate.
 
Korea's solid export growth and facilities investment as well as improvements in the global economy were cited as key factors behind the central bank's decision to raise its GDP outlook.
 
While the bank expects consumption recovery and the pickup in global trade to continue in 2018, an anticipated slowdown in facilities investment set its forecast for next year at two-point-nine percent.
 
Earlier in the day, the central bank decided to maintain the country's lowest-ever benchmark rate at one-and-a-quarter percent for the 16th consecutive month.
 
The freeze comes amid concerns that higher interest rates would take a sizeable toll on Korean households and their ability to pay back loans.
 
South Korea's household debt currently stands at around 14-hundred trillion won.
 
However, Governor Lee Ju-yeol hinted that a rate hike may be imminent, saying that macroeconomic conditions appear to be "somewhat ripening" for monetary tightening.
 
Lee said that BOK policymakers will continue to weigh domestic and global risk factors as well as monitor the flow of the local economy and financial market stability.
Oh Soo-young, KBS World Radio News.