According to Yonhap News,

(SEOUL=Yonhap News) Global investment banking giant Morgan Stanley raised its 2014 and 2015 GDP growth projection for South Korea on June 9, citing recovery of domestic consumption in the third quarter.

GDP growth projections for 2014 and 2015 stood at 3.6 percent and 4.1 percent, respectively, up 0.1 percent from the last projections. In a report, Morgan Stanley said that overall consumption, which took a severe beating following the Sewol ferry disaster in April, will likely affect growth in the second quarter, but signs of recovery in the real estate market will help boost consumer sentiment and private consumption from the third quarter.

According to Morgan Stanley, with the Bank of Korea reclassifying Korea’s spending on research and development (R&D) in GDP calculation early this year, this year’s GDP and that for 2015 will rise by 0.2 percent.

But it also took note of the stronger won and China’s slowing demand for imports, which could significantly impact exporters in the second half of the year. Previously, Morgan Stanley had come up with a significantly low won-dollar exchange rate forecast for 2014 and 2015.

jhpark@yna.co.kr

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