The Asian Development Bank (ADB) on Tuesday sharply revised up its growth outlook for the South Korean economy this year, citing robust exports and an expansion in facility investment.

The Manila-based bank expected Asia's fourth-largest economy to grow 4 percent this year, up from its earlier estimate in April of 3.5 percent. The ADB maintained its 2022 growth forecast for Korea at 3.1 percent.

The ADB joined other organizations that have jacked up their growth estimates for the South Korean economy amid a global economic recovery.

The bank's outlook is on a par with the growth estimates by the Bank of Korea (BOK) and global credit appraiser Standard & Poor's Global Ratings (S&P). The Korean government expected the country's economy to grow 4.2 percent this year.

The upbeat growth outlook comes as the Korean economy is on a recovery track on the back of brisk exports of chips and autos and improving domestic demand. Asia's fourth-largest economy contracted 0.9 percent last year.

The South Korean economy grew 1.7 percent in the first quarter from three months earlier, accelerating from a 1.1 percent on-quarter gain in the fourth quarter of last year, central bank data showed.

The country's exports rose 14.1 percent on-year in the first 10 days of July on the back of brisk demand for chips, autos and petroleum products, according to customs data. Exports extended their gains to the eighth straight month in June amid the global economic recovery.

But a recent flare-up in COVID-19 cases and the fast spread of the highly contagious delta variant have emerged as major downside risks for the Korean economy.

The government said in its latest economic assessment report that spiking virus cases could heighten uncertainty over an improvement in domestic demand.

The ADB, meanwhile, lowered its 2021 growth outlook for 46 developing Asian countries to 7.2 percent from its April estimate of 7.3 percent, citing a flare-up in COVID-19 cases. Next year, they are expected to grow 5.4 percent, it said. (Yonhap)