The Organization for Economic Cooperation and Development (OECD) said on Wednesday that it expected the South Korea's economy will likely mark a 2.2-percent contraction this year but will rebound with a growth rate of 3.5 percent in 2010.

The OECD's 2009 forecast for South Korea stands at the average of outlooks for its members, but the 2010 forecast for the nation is ranked top among the 30 members.

The OECD, as it adjusted its earlier projection for the South Korean economy, pointed at the South Korean government's massive stimulus measures as the drive of the rebound.

"After a deep plunge in the final quarter of 2008, the economy has bottomed out as fiscal stimulus began to take effect," the OECD said in a report.

"Both government consumption and construction investment, led by public infrastructure projects, recorded double-digit increases in the first quarter of 2009."

The 2009 projection is sharply down from its earlier forecast of a 2.7-percent expansion, but better than a 2.4-percent decline and a 2.9 percent contraction expected by the nation's central bank and the World Bank.

The optimistic data comes amid various positive signs, such as financial market and foreign currency conditions, hinting at a bottom-out of the South Korean economy.

The OECD, however, showed caution in that a full economic recovery is reliant on outside conditions.

"With exports accounting for about half of output, Korea's prospects remain closely linked to world trade," the OECD explained.

"A faster-than-expected global rebound would lead to a stronger upturn in Korea, while a delayed recovery could push output growth back into negative territory," the organization said.

(Xinhua News Agency June 25, 2009)