South Korean central bank, the Bank of Korea (BOK), on Tuesday revised down its forecast for the country's economic growth rate in 2005 from previous 4 percent to 3.8 percent due to soaring oil prices.

"A number of factors including high oil prices slowed the pace of recovery and lowered on-year economic growth in the first half," the BOK said a press release carried on its website.

South Korean economy grew 3 percent contrast to the same period of last year in the first half of 2005, 0.4 percent less than the BOK's previous forecast.

Private spending, which has remained in the dumps since a consumer credit bubble broke at the end of 2002, will be a key factor in leading the nation's growth in the second half, the central bank commented in the release.

Expanded investment by the government and state-run companies, as well as the stable value of the won against the US dollar, will also give the economy a much-needed boost, according to the BOK.

The BOK also said the exports will remain resilient in the latter half of the year, but are to experience lower gains.

The nation's current account surplus should reach 13 billion US dollars for the year, down from the bank's earlier estimate of 16 billion dollars, it added.

The BOK also anticipates that these factors will help South Korea's economy grow by 4.5 percent in the second half of 2005 from a year earlier, up from its earlier projection of a 4.4-percent gain.

Source: Xinhua