International credit ratings agency, Standard & Poor's, says the South Korean economy could grow around six percent in 2004.

S&P's forecast comes after the Bank of Korea on Thursday adjusted down its economic growth forecast for the second half of the year to five percent from five point six percent.

The U.S. credit ratings agency said in order to achieve a six-percent growth in the second half of the year, South Korea needs to implement the government's agenda aimed at improving corporate governance and making the labor market more flexible.

S&P added that the government will have to undertake a second round of reforms that will further reduce the role of the state in the economy, particularly in the financial sector.

In addition, S&P called for a balanced development between the equity market and the bond market.

Currently, foreigners own nearly 44 percent of stocks traded on the Korean Stock Exchange, while foreign ownership in the local bond market comes to less than one percent.