South Korean central bank revises up growth outlook for 2014

South Korean central bank upgraded its 2014 growth outlook by 0.2 percentage point to 4 percent on Thursday as a new global standard was applied to compiling the gross domestic product (GDP). The Bank of Korea (BOK) revised up its 2014 GDP growth outlook to 4 percent from 3.8 percent estimated three months earlier. The figure for 2015 was also revised upward to 4.2 percent from an earlier forecast of 4 percent. The 2013 GDP growth was upgraded by 0.2 percentage point to 3 percent on March 26. The BOK applied the 2008 System of National Accounts (SNA), a new global guideline on how to calculate the GDP, to the 2013 figure. BOK Governor Lee Ju-yeol told reporters in the press conference after the April monetary policy meeting that the change resulted mainly from the revised standard, noting there should not have been any change in the outlooks unless the new guideline was applied. Two days earlier, the International Monetary Fund (IMF) upheld its outlook for South Korea's 2014 growth at 3.7 percent, with the 2015 outlook remaining unchanged at 3.8 percent. Outlook for 2014 consumer price inflation was revised down to 2. 1 percent from an earlier estimate of 2.3 percent due to the outstanding fall in farm goods prices in the first quarter, Lee said. The figure for 2015 headline inflation was unchanged at 2.8 percent, but outlook for core consumer price inflation, which excludes agricultural and petroleum products, was revised downward by 0.1 percentage point to 3 percent for 2015. Governor Lee said during the press conference that the consumer price inflation had stayed low on the back of one-off factors from the supply side, forecasting the inflation would accelerate into the second half of this year. Consumer prices rose 1.3 percent in March from a year earlier, higher than a 1 percent gain in the prior month and the first rebound in four months. The inflation stayed below the BOK's mid- term inflation target band of 2.5-3.5 percent for 22 months in a row. Goods export was expected to expand 6.5 percent in 2014, before jumping 8.3 percent in 2015. Outlook for current account surplus was set at 68 billion U.S. dollars in 2014 and 58 billion dollars in 2015. Those were higher than 55 billion dollars for 2014 and 45 billion dollars for 2015 each estimated three months ago. Private consumption, another growth engine of the economy, was forecast to increase 3.1 percent in 2014 and 3.7 percent in 2015 respectively. Outlook for facility investment growth was set at 5.7 percent in 2014 and 6.3 percent in 2015 each, and those for investment in intellectual property assets, which started to be included in the GDP under the revised rule, were placed at 7 percent this year and 6.9 percent for next year respectively. The BOK forecast the South Korean economy would create 500,000 jobs in 2014, upgrading its earlier forecast at 430,000 jobs added. The outlook for 2015 was unchanged at 450,000 jobs created. The outlook for 2014 jobless rate was revised upward to 3.2 percent from an initial forecast of 3 percent, with the figure for 2015 upgraded to 3.1 percent from 3 percent.