IMF lifts Korea's 2024 economic growth forecast to 2.3%

The International Monetary Fund logo at its headquarters in Washington, U.S. [REUTERS/YONHAP]

The International Monetary Fund (IMF) inched up its forecast for Korea's economic growth for this year, placing it higher than the government’s outlook.

Korea’s economy will grow 2.3 percent this year, upped from the previous prediction of 2.2 percent in October last year, according to the IMF’s January 2024 World Economic Outlook on Monday.

The IMF previously lowered Korea's forecast from 2.6 percent in January last year to 2.4 percent last April and then 2.2 percent last October.

Korea, the United States and Australia are the only developed nations where the IMF raised the outlook in its latest projection, said the Ministry of Economy and Finance. The outlook for Germany, France and Japan was down 0.4 percentage points, 0.3 percentage points and 0.1 percentage points, respectively.

The IMF did not specify the reasons for Korea's revised outlook, but the revised outlook for the United States and China — Korea's key trading partners — are seen as the reasons for the raised projection, according to the ministry.

The IMF lifted the U.S. outlook for this year to 2.1 percent from the previous 1.5 percent, and China to 4.6 percent from 4.2 percent.

"Korea's growth outlook is the highest among the key developed nations, and the growth rate is projected to be the highest compared to last year's growth increase," said the finance ministry on Thursday.

The ministry projects Korea to grow 2.2 percent this year, and the Bank of Korea 2.1 percent.

The global economy, in the meantime, is expected to grow 3.1 percent this year, an upgrade of 0.2 percentage points from the previous projection, driven by the stronger-than-expected performance of the U.S. and emerging markets, as well as fiscal support of the Chinese government.

BY JIN MIN-JI, SHIN HA-NEE [shin.hanee@joongang.co.kr]