ADB lowers Korea's growth projection to 3 percent

Containers are unloaded at a dock in Busan. [YONHAP]

The Asian Development Bank (ADB) lowered its projection for the growth of the Korean economy this year to 3 percent.

“After exceptionally high growth in 2021 from a low base in 2020, the economy is expected to settle into more sustainable growth at 3 percent in 2022 and 2.6 percent in 2023,” the bank said of Korea’s economy in its Asia Development Outlook report released on Wednesday.


In December, the bank projected Korea's economy would grow 3.1 percent in 2022.

The ADB is a regional development bank dedicated to reducing poverty in Asia and the Pacific.

In the report released Wednesday, the bank predicted Korea's inflation rate to be 3.2 percent in 2022 due to temporary factors, including high oil and food prices. That is 1.3 percentage points higher than a 1.9 percent projection made in December. It said inflation will fall to 2 percent in the following year.

According to Statistics Korea on Tuesday, consumer prices grew 4.1 percent in March, the fastest rate since December 2011.

“The significant progress being made in Covid-19 vaccine rollouts bodes well for the continued resilience of developing Asia’s economies. 66 percent of the region’s population is now fully vaccinated,” read the report.

The report reviewed 49 economies in Asia and the Pacific, excluding Japan, Australia and New Zealand.

It forecast the region’s growth at a “buoyant but steady 5.2 percent in 2022 and 5.3 percent in 2023."

Talking about the United States, Europe and Japan, the report said: "The Russian invasion of Ukraine will push oil prices and inflation up, and rising interest rates will drag on growth. In aggregate, the major advanced economies are expected to grow by 3.5 percent in 2022 and 2.4 percent in 2023.”

BY JIN MIN-JI [jin.minji@joongang.co.kr]