IMF raises economic growth outlook for Korea to 1.9%

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IMF raises economic growth outlook for Korea to 1.9%

Published: 19 Jan. 2026, 18:30 Updated: 19 Jan. 2026, 19:26

JIN MIN-JI
[email protected]

Audio report: written by reporters, read by AI

Containers are loaded at a port in Pyeongtaek, Gyeonggi, on Jan. 9. [NEWS1]

The International Monetary Fund (IMF) raised its economic growth outlook for Korea this year to 1.9 percent, up 0.1 percentage point from the October 2025 forecast, amid the global surge in AI investment and accommodative financial conditions.

The revision aligns with the global growth outlook, as the IMF raised its global growth forecast for this year to 3.3 percent from 3.1 percent in its World Economic Outlook, which was released on Monday. Growth projections were also revised upward for advanced economies, including Korea and the United States, from 1.6 percent to 1.8 percent, and the forecast for emerging markets and developing economies was increased from 4 percent to 4.2 percent for the same year, with China’s growth forecast up from 4.2 percent to 4.5 percent.

For 2025, the IMF also revised up Korea’s forecast from the previous 0.9 percent to 1 percent.

Downside risks stemming from changes in trade policies are being offset by upside factors, such as a surge in AI investment and fiscal and monetary support, according to the report. But the IMF assessed that risks to the global economy remain tilted to the downside, citing concentrated investments in a small number of AI and advanced technology firms, high trade policy uncertainty, geopolitical tensions and elevated debt levels in major economies.

The IMF warned that if expectations for AI-driven productivity and profitability weaken, a sharp correction in asset prices could occur, which may amplify financial risks. At the same time, it noted that improved productivity from the AI adoption could serve as an upside driver for the global economy.

Meanwhile, global inflation is projected at 3.8 percent this year and 3.4 percent next year, continuing a downward trend from 4.1 percent in 2025.

BY JIN MIN-JI [[email protected]]