Despite geopolitical tensions such as the increasing missile and nuclear threats from North Korea, The Central Bank of South Korea has reportedly raised its economic growth forecast for the current year on Thursday.

According to the Bank of Korea, the fourth-largest economy an Asia will expand by 3% in 2017 which is a slight increase from its original estimation of just 2.8%.

"The local economy will continue sound growth," the central bank stated in a report. Additionally, the bank predicts a sensible recovery in terms of its exports and internal consumption.


A shopping district in South Korea.

For the coming year of 2018, the central bank sets it forecast expansion to 2.9%

The reconsideration in the growth estimates was done in line with the standpoint of the International Monetary Fund. Earlier this month, the IMF casted its forecast for the GDP of South Korea for 2017 which was a 3% increase. This includes the speed of recovery in international investment and trade.

On Wednesday, Moody’s Investor Service told reports that it was holding a record high AA2 credit rating for South Korea as it is estimating that the country will post growth 2-3% over the coming years.

Moody also considered the rising tensions over the missile and nuclear threats of North Korea which will of course weigh on the solvency of South Korea.

"Uncertainty over the potential for military conflict on the Korean Peninsula is rising with the increasingly strident rhetoric," Moody told reports. "A military confrontation would have significant negative credit implications."

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