* IMF likely to raise GDP forecasts for 2009, 2010
* Revised forecasts expected after team's visit in Dec
* Restructuring of unproductive service sector needed (Adds details)
By Yoo Choonsik
SEOUL, Oct 30 (Reuters) - The International Monetary Fund will likely upgrade South Korea's gross domestic product forecasts for this year and next following stronger-than-expected growth in the third quarter, a senior IMF official told Reuters on Friday.
"It's true that the Q3 number was stronger than expected...This makes it more likely that we would revise in a positive way our predictions for this year and next year," Anoop Singh, director of the IMF's Asia and Pacific Department, said in an interview in Seoul.
The IMF's current forecast is for South Korea's GDP to shrink by 1.0 percent this year before expanding by 3.6 percent next year.
The central bank said on Monday the economy grew a seasonally adjusted 2.9 percent in the third quarter from the previous quarter, the most in 7-½ years.
Mahmood Pradhan, senior adviser at the department, said fresh forecasts would be released probably after a delegation from the organisation visits and holds a consultation meeting with the South Korean government in the first week of December.
An increasing number of global investment banks are withdrawing their earlier predictions that Asia's fourth-largest economy would suffer its first annual decline in 11 years this year.
The government's official forecast is for GDP to contract by 1.6 percent, but Finance Minister Yoon Jeung-hyun said recently the economy would shrink by less than 1 percent.
Singh said South Korea, which relies heavily on exports for growth and job creation, needs to push for restructuring of unproductive domestic service industries to secure more sustainable long-term growth.
"What can be done is to remove any distortions in the economy that tend to favour the tradeable sectors over the non-tradeable and services," Singh said, referring to the country's policy widely seen as focused on promoting exports.
South Korea's service sector lags far behind advanced economies in productivity, which analysts have blamed on government protection from competition.
"It's important for Korea to bring its non-tradeable sector, the service sector, into the same competitive position as tradeables," he added. (Editing by Jonathan Hopfner)