Exports, a key growth engine, have logged an on-year fall since October last year, though the government forecast a turnaround as early as this month on the back of rising demand for semiconductors. (image: Korea Bizwire/Kobiz Media)
SEOUL, Oct. 10 (Korea Bizwire) – The International Monetary Fund (IMF) maintained its 2023 growth outlook for South Korea at 1.4 percent Tuesday but revised down the forecast for next year amid a global economic slowdown.
The organization’s latest projection for 2023 is the same as its forecast made in July when it slashed the growth outlook for South Korea by 0.1 percentage point, citing “persistent challenges” in the global economy.
The figure is on par with the South Korean government and the Bank of Korea’s 1.4 percent forecasts for this year. The Asian Development Bank set its outlook at 1.3 percent.
The IMF, however, cut its growth projection for South Korea for 2024 to 2.2 percent from the earlier forecast of 2.4 percent as the faltering Chinese economy and the sluggish manufacturing sector have slowed down the global economy.
South Korea is struggling with falling exports as aggressive monetary tightening by the United States and other major nations to curb inflation has weakened demand.
Exports, a key growth engine, have logged an on-year fall since October last year, though the government forecast a turnaround as early as this month on the back of rising demand for semiconductors.
For the global economy, the IMF kept the growth forecast for this year at 3 percent while lowering the 2024 outlook by 0.1 percentage point to 2.9 percent.
The global economy has been “stable but slow,” as the surge in demand for services in the post-pandemic era led to a gradual recovery in the first half of the year, but it has lost steam amid the sputtering Chinese economy and the sagging manufacturing sector.
The IMF called for maintaining a tightening monetary policy path and implementing measures to bolster fiscal soundness and boost productivity.
(Yonhap)
