IMF ups Korea's growth forecast to 2.5 percent

Economy

Published: 16 Jul. 2024, 22:00

IMF ups Korea's growth forecast to 2.5 percent

The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington on September 4, 2018. [REUTERS/YONHAP]

The International Monetary Fund (IMF) bumped up its forecast for Korea's economic growth for this year by 0.2 percentage points to 2.5 percent while keeping its growth projection for the global economy unchanged at 3.2 percent.

In its latest July 2024 World Economic Outlook, published on Tuesday, the International Monetary Fund (IMF) projected that Korea’s real GDP would grow 2.5 percent this year, revised from its previous prediction of 2.3 percent in April.

In April, the monetary agency had held its growth outlook for Korea steady from its January prediction.

The IMF expects the Korean economy to grow 2.2 percent next year, down 0.1 percentage point from the April projection.

Korea’s Ministry of Economy and Finance revised its forecast for the country's economic growth this year from the previous 2.2 percent to 2.6 percent in July, citing robust exports driven by chip demand. The Bank of Korea also upped its projection in May from 2.1 percent to 2.5 percent.

Korea's GDP advanced 1.3 percent in the January-March period from the previous quarter, according to the central bank's preliminary estimate announced in April, marking the steepest growth since the fourth quarter of 2021 and surpassing the market expectation of 0.6 percent.

The second quarter figure will be announced on July 25.

Meanwhile, the IMF knocked down its growth forecast for the United States this year by 0.1 percentage point to 2.6 percent due to its lower-than-expected GDP growth in the first quarter. Its forecast for Japan fell 0.2 percentage points to 0.7 percent after a safety scandal among major carmakers suspended production, bludgeoning the country's auto exports.

The IMF expects advanced economies — including 41 nations such as the United States, Britain, Japan and Korea — to see an average annual growth of 1.7 percent this year, unchanged from three months prior.

The forecast for emerging economies stood at 4.3 percent, upped from April’s 4.2 percent. China’s growth projection was lifted significantly by 0.4 percentage points to 5.0 percent. The country reported strong growth in the first quarter on the back of robust industrial production and private consumption.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]