South Korea's economy is recovering faster than many other major countries, as improving exports, consumption and corporate investment ease jitters over a global recession, data showed Monday.

According to the latest growth outlook of the International Monetary Fund (IMF), released in October, South Korea's economy will shrink 1 per cent this year, up from its earlier projection of a 3 per cent contraction unveiled three months earlier.

The 2-percentage point upward revision is the steepest adjustment among the Group of 20 major economies in the world over the same period, Yonhap News reported. It is also much higher than the average of 0.2 percentage point by which the IMF revised up for the whole G20 countries.

Australia came next with its growth outlook lifted by 1.2 percentage points, followed by China and Germany with 1 percentage point and 0.9 percentage point during, respectively. Despite improving global economic conditions, Canada and Britain saw their growth predictions lowered by 0.2 percentage point each.

The IMF painted rosier outlooks for Asia's fourth-largest economy for next year as well.

In its October forecast, South Korea's economy was expected to grow 3.6 per cent in 2010, up from its July prediction of a 2.5 per cent advance. The 1.1-percentage-point revision is the second largest among the G20 countries following Turkey for which the IMF raised growth projection by 2.2 percentage points.

The relatively upbeat outlook for South Korea's growth is in line with latest indicators unveiled by the government and other think tanks, with industrial output, corporate investment and spending all bouncing back from their lackluster figures months ago.

Earlier, the finance ministry assessed that the nation's economy is making a "better-than-expected" recovery, though uncertainties still remain.

The state-run think tank Korea Development Institute echoed the views, saying South Korea's economy remains in the "recovery phase"as exports, consumption and other indicators are rebounding fast, driven in part by eased instability in overseas markets.

South Korea's gross domestic product expanded 2.9 per cent in the third quarter from three months earlier, the fastest advance in over seven years, according to the central bank.