The International Monetary Fund has upgraded its economic forecast for South Korea, saying its gross domestic product would contract by 1.75% in 2009, better from its July forecast of 3%.

However, experts fear that South Korea would not be able to see the same momentum of economic growth shown in the first half of the year for the rest of 2009.

IMF said, "Going forward, the recent growth momentum is likely to moderate during the second half of 2009, and be followed by a drawn-out recovery."

IMF has left its forecast for the next year untouched at 2.5%.

Second-quarter GDP of South Korea increased by 2.3% from the first quarter.

During Q2 South Korea's economy contracted by 2.5%, better from 4.2% contraction in the previous quarter.