The Korean economy is experiencing a modest recovery, helped by supportive monetary and fiscal policies and buoyant exports. GDP growth is expected to rebound to 2.8 percent in 2013(from 2 percent in 2012), and strengthen further to 3.7 percent in 2014, in view of the projected global recovery and a gradual pickup in domestic demand. Inflation has fallen to 0.7 percent in October 2013 from 4.2 percent in 2011, well below the target band of 2½–3½ percent. With stronger exports and muted domestic demand, the current account surplus has widened and is expected to reach around 5.5 percent of GDP in 2013, putting an upward pressure on the exchange rate. However, risks are on the downside. The main near-term risks are external: sharply slower growth in Korea’s main trading partners or severe global financial market stress.