In this file photo uploaded Monday, a view of the International Monetary Fund (IMF) logo at its headquarters in Washington, US is shown. (Yonhap-Reuters) The International Monetary Fund (IMF) on Monday slightly raised its economic growth forecast for South Korea this year to 1.9 percent, the finance ministry said.
In its latest World Economic Outlook report, the IMF increased its projection for Asia’s fourth-largest economy by 0.1 percentage point from its previous estimate released in October.
The IMF has steadily raised its growth outlook for South Korea since July, the Ministry of Economy and Finance said, noting the latest forecast exceeds the average growth projection of 1.8 percent for advanced economies.
The IMF’s revised forecast is broadly in line with estimates from other major institutions and the South Korean government.
Seoul has projected real gross domestic product (GDP) growth of 2 percent for the local economy this year, while the Bank of Korea forecast 1.8 percent growth. The Organization for Economic Cooperation and Development (OECD) projects growth of 2.1 percent.
The IMF previously said South Korea entered a recovery phase in the second half of last year, supported by more accommodative fiscal and monetary policies, and improved consumer sentiment, and that the economy is expected to strengthen further this year.
However, the IMF warned in its latest report that risks to the global economy remain tilted to the downside.
The report cited key downside factors, including concentrated investment in a small number of artificial intelligence (AI) and advanced technology firms, persistently high trade uncertainty, geopolitical tensions, and elevated debt levels in major economies.
The IMF releases its outlook reports four times a year — in January, April, July and October. The April and October reports provide comprehensive forecasts for all member countries, while the January and July updates focus on about 30 major economies, including South Korea.