Here is the crucial risk to Bank of Korea's growth forecast

They foresee a 2.8% growth.

According to DBS, despite the softness in recent economic data, they expect the BOK to hold rates steady tomorrow. When the BOK cut rates in July and October lastyear, they also downgraded the annual economic forecasts.

At present, the downside risks to the BOK’s growth forecast of 2.8% for 2013 (1ppt lower than the long term average) are considered to be low. In fact, the recent weakness in January’s output data was exaggerated due to poor weather.

Here's more from DBS:

February’s PMI has risen above 50, and the leading indicator of new orders increased notably. As such, we don’t expect the BOK to downgrade its assessment of macro conditions because of temporary data weakness.

Meanwhile, the need of lowering interest rates to weaken the KRW has been reduced. The KRW has returned gains versus the USD since mid-January and the KRW/JPY cross rate has also stabilized, as a result of currency war worries and more recently, heightened geopolitical tensions with North Korea.

Rate cut hopes remain alive in the markets, for now. Foreign net purchases of KRW bonds surged KRW 3.5trn in February. The 2-year KTB yield has fallen below the policy rate of 2.75% (current: 2.65%).

The expectations for a rate cut will likely remain for some time, before receding in late-2Q. Industrial output growth will likely normalize from 2Q, and inflation is expected to rise to the 2% level from March/April.