▲ IMF
The International Monetary Fund (IMF) has raised its growth forecast for South Korea this year, projecting it to be among the highest for advanced economies.
The Ministry of Economy and Finance announced that in its July World Economic Outlook released today (July 8), the IMF revised its forecast for South Korea's real gross domestic product (GDP) growth this year to 2.6%.
The IMF releases economic outlooks for all member countries every April and October, and updated forecasts for 30 major economies in January and July.
The latest projection for Korea is 0.7 percentage points (p) higher than the 1.9% forecast made just three months ago in April.
Among the 30 major countries covered in the report, this is the largest upward revision, tied with Iran.
The growth forecast for Korea this year is the highest among the advanced economy group, which includes the United States, Japan, the United Kingdom, Germany, France, Australia, Canada, Italy, Spain, and the Netherlands.
Only the United States (2.3%) and Spain (2.1%) recorded growth in the 2% range, while Australia (1.9%), Canada (1.1%), and the Netherlands and the United Kingdom (1%) were in the 1% range, with all other countries falling below 1%.
The IMF's outlook is interpreted as reflecting the robust export growth driven by the strong performance of the semiconductor industry.
In its report, the IMF identified South Korea as one of the top four net exporters of AI-related hardware. It explained that despite high dependence on energy imports from the Middle East, strong exports of semiconductors and AI-related hardware led to a first-quarter growth rate (annualized) of 7.5%, significantly exceeding the April forecast of 1.8%.
This IMF forecast for Korea aligns with the trends seen in revisions by major domestic and international institutions.
Previously, the Bank of Korea (from 2.0% to 2.6%) and the Korea Development Institute (KDI, from 1.9% to 2.5%) raised their growth forecasts in May, and the Organization for Economic Cooperation and Development (OECD) also increased its projection from 1.7% to 2.6% last month.
The IMF also raised its growth forecast for Korea for next year from 2.1% to 2.5%, an increase of 0.4 percentage points.
This is also the highest level among advanced economies.
It is higher than the next-year growth forecasts from major institutions such as the Bank of Korea (2.1%), the KDI (1.7%), and the OECD (1.9%).
The Ministry of Economy and Finance assessed that "the upward adjustment of growth forecasts for this year and next year suggests that Korea's growth momentum related to semiconductors and AI is likely to continue into next year."
Meanwhile, the IMF lowered its global economic growth forecast for this year by 0.1 percentage points from 3.1% to 3.0%, while raising its forecast for next year by 0.2 percentage points from 3.2% to 3.4%.
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