By Xu Aiying and Lee Jihae

The Bank of Korea has raised its growth forecast for the economy this year from minus 1.3% to minus 1.1% and that for next year to 3%, up from its projection of 2.8% made in August.

The bank on Nov. 26 released a report on these and other forecasts for the economy.

The domestic economy is expected to see mild recovery due to global recovery and the resulting improvements in trade and the continuation of favorable investment flows, it said.

"Facility investment will continue to increase as investment in the IT sector is forecast to sustain its growth and delayed investment in the non-IT sector is also expected to resume," the report added.

On the other hand, the bank predicted slow recovery of private consumption due to the resurgence of COVID-19 and delayed improvement in household income.

The report forecast the current account surplus at USD 65 billion this year and USD 60 billion next year, up from the August projections of USD 54 billion and USD 55 billion, respectively, reflecting strong recovery in exports.

Consumer inflation was expected to finish at 0.5% this year and 1.0% next year.

The bank's Monetary Policy Board also froze the key interest rate at 0.5%.

xuaiy@korea.kr