Wrapping up a two-week visit, the International Monetary Fund said it expects Asia's fourth-largest economy to expand 3.2 percent this year, up from its earlier prediction of 3.0 percent.
This year's growth outlook was revised up to 3.2 percent from 3.0 percent estimated by the worldwide body in the previous month.
"This recovery in many countries of Europe is now increasingly solidifying and strengthening", said Jorg Decressin, deputy director of the IMF's European Department.
The IMF raised its 2017 GDP estimate to 3.2 percent from 3 percent projected in September.
The IMF also said growth is forecast at around 3 percent in 2018, with private consumption growth benefiting from the large minimum wage increase and from policies supporting employment and social spending.
The IMF delegation, which has held an annual meeting with the South Korean government from early this month, announced the meeting result and upgraded its growth forecast for the Asian economy, according to the Ministry of Strategy and Finance.
The worldwide body recommended South Korea to maintain accommodative monetary policy and expansionary fiscal policy.
Unemployment rate will reach 9.5% this year, 9.3% next year, and 8.8% in 2019.