IMF assesses S. Korea as safe haven on solid fundamentals

The International Monetary Fund (IMF) on Friday assessed the South Korean economy as a safe haven for global investors on the back of the economy's solid fundamentals.

"Korea has emerged as a safe haven of sorts in the summer's market turmoil," the IMF said in a statement after holding an annual meeting with Seoul government.

The global body cited the country's low inflation, strong fiscal conditions and ample foreign exchange reserves as factors to attract foreign capital.

The IMF expected the economy's growth to rise from 2.8 percent this year to 3.7 percent next year, but the figure was lower than 3.9 percent estimated by the Finance Ministry and 3.8 percent by the Bank of Korea (BOK).

Downside risks remained in the South Korean economy, the IMF said, noting that domestic demand momentum would remain relatively weak due to debt overhang in parts of the household and corporate sectors.

Rapid population aging in the country will be a drag on the growth potential, the global body added.