HONG KONG (Yonhap News) ― The South Korean economy will likely grow more than 3 percent in 2013 from this year amid improving external and internal macro environments, JPMorgan said Tuesday.

The U.S. investment bank predicted South Korea’s real gross domestic product will recover to the 3 percent level next year, compared to an estimated 2.3 percent in 2012, with exports to rise and fiscal policy to turn more supportive.

“On a quarterly basis, real GDP growth has slowed for three straight quarters since the first quarter of 2012, but demand side conditions now look aligned to support an improvement in manufacturing output, which should lift the overall GDP growth modestly starting this quarter,” JPMorgan said in a report.

“The key risks to our growth view are external demand, especially in developed market countries, and any possible policy interruptions after the presidential election in December,” it added.

Accordingly, the country’s equity market is on a gradually rising trajectory toward 2013, JPMorgan said.

“Despite vulnerable movements over the progress of global risk aversion, we believe a gradual pace of the Korean won appreciation should remain intact in 2013, resulting in continuing foreign money inflow into the domestic credit and equity markets,” it said.