The South Korean economy is moving from strength to strength. That’s the opinion of the International Monetary Fund and predictions made by Standard & Poor’s. It is good news for Saudi and Korean businessmen. In fact, the IMF has revised up Korean economic growth for next year to 3.6 percent after a contraction of one percent this year, citing brisk exports and improving domestic demand. The IMF had earlier predicted in July this year a 2.5 percent growth next year, following a three percent contraction this year.

The Standard & Poor’s, meanwhile, reported that the South Korean economy is expected to expand 4.3 percent in 2010 on rising demand in emerging markets, giving a more optimistic outlook. S&P forecast in a report that the Korean economy will shrink 1.3 percent in 2009 and expand 4.3 percent in 2010, as resilient emerging markets in the region are boosting demand and business sentiment in South Korea.

“With economic indicators in that nation’s markets showing signs of improvement, the IMF further made upgrades in the prediction, once in July and then in August this year,” said an IMF report. But, the IMF’s outlook still falls below that of the South Korean government, which predicted the economy to be stronger, after falling slightly by 1.5 percent this year.

Some think tanks carefully voice that the economy may turn positive this year and grow six percent next year. Whatever the case may be, good days are ahead, especially for the business gentry of Saudi Arabia and South Korea. Reflecting optimistic views on the economy, the South Korean stock market and foreign exchange value have recovered, with the Seoul bourse hitting near the 1,700 mark for the first time since October 2008 and the foreign reserves soaring to a 13-month high in August this year.

Many public and private sector Korean companies and agencies have come forward to sign new business deals. South Korea’s National Pension Service, which is worth $200 billion, is planning a series of international property purchases.

The fund is considering property in Paris, New York and London, where it expressed particular interest in the HSBC Tower at Canary Wharf. On bilateral level, business between Riyadh and Seoul is poised to grow further.

“Since the visit of Custodian of the Two Holy Mosques King Abdullah to Seoul in 1998 as the crown prince, the two countries have even come closer,” said South Korean Ambassador Hong Jong-ki. The two countries have, since then, set out a new vision of relationship in the fields of energy, construction, education, IT and culture. Also, Saudi-South Korean trade volume has grown substantially in 2008 to reach SR146.3 billion, representing an increase of 40 percent from 2007, according to official statistics.

Saudi imports from South Korea which mainly include automobiles, steel products, blankets, air conditioners, and other industrial machinery reached a total value of SR41.3 billion in 2008, said Jong-ki. In recent years, both countries have moved to strengthen their trade and investment ties, added the diplomat, saying that Saudi Arabia is one of the largest supplier of oil and construction materials to Korea. The two countries currently have 82 joint ventures.

Korean companies in Saudi Arabia mainly operate in the construction and manufacturing industries. The two countries have evinced keen interest to promote joint investments. Recently, Saudi International Petrochemical Co. (Sipchem) said it had agreed to form a joint venture with South Korea’s Hanwha Chemical Corp. to build polymer plants in Saudi Arabia.