Korea's economy to grow 1.6% in 2023, Finance Ministry forecasts

Export cargo at a port in Busan. Korea’s economy is expecting major headwinds in 2023 with export shrinking. [YONHAP]

Korea's economy will grow 1.6 percent next year, according to the latest forecast from the Finance Ministry, as the country faces strong economic headwinds and uncertainty globally.

The outlook is lower than those previously published by international organizations, including the IMF and the OECD.

If the projection holds, 2023 will likely be the second year of decelerating growth. This year, the economy is forecast to grow 2.5 percent after last year's 4.5 percent.

The government is expecting weaker exports and investment, which will affect employment. Exports are expected to decline 4.5 percent in 2023, after this year's rise of 6.6 percent.

Inflation is expected to remain above 2 percent, at 5.1 percent this year and 3.5 percent this year.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]