The Asian Development Bank (ADB) on Wednesday revised up its growth outlook for the South Korean economy this year, citing robust exports of chips and the country's fiscal and monetary support.

The Manila-based bank expected Asia's fourth-largest economy to grow 3.5 percent this year, up from its earlier estimate in December last year of 3.3 percent. The ADB forecast predicted the Korean economy to grow 3.1 percent for next year.

The bank's outlook is higher than the growth estimates by the Bank of Korea (BOK) and the Organization for Economic Cooperation and Development (OECD). The BOK expected the Korean economy to grow 3 percent, and the OECD put the 2021 growth estimate at 3.3 percent.

Last month, the International Monetary Fund (IMF) sharply raised its growth outlook for South Korea to 3.6 percent from 3.1 percent.

The upbeat growth outlook comes as the Korean economy is on a recovery track, aided by brisk exports of chips and autos and improving domestic demand.

The South Korean economy grew 1.6 percent in the first quarter from three months earlier, accelerating from a 1.2 percent on-quarter gain in the fourth quarter of last year, according to the BOK.

The Korean economy contracted 1 percent last year due to the new coronavirus outbreak.

The country's exports, which account for half of the economy, increased 16.6 percent on-year in March to extend their gains for the fifth consecutive month. Overseas shipments soared 45.4 percent on-year in the first 20 days of April.

BOK Gov. Lee Ju-yeol has said the country's growth rate for this year will likely reach the mid-3 percent range. Finance Minister Hong Nam-ki laid out a brighter outlook Tuesday, penciling in a growth rate in the 3.5-3.9 percent range.

The ADB, meanwhile, forecast 46 developing Asian countries to expand 7.3 percent this year on the back of the COVID-19 vaccine rollout and fiscal stimulus, up from its previous estimate of 6.8 percent. Next year, they are expected to grow 5.3 percent, it said. (Yonhap)