The Asian Development Bank (ADB) has raised its economic growth forecast for South Korea to 3.2% for this year. This adjustment reflects increased exports driven by growing global demand for artificial intelligence (AI) semiconductors and a gradual recovery in private consumption. This marks the second consecutive upward revision since July.
In its Asia Economic Outlook report released on September 23, ADB presented South Korea's growth rate as 0.6 percentage points higher than the July forecast of 2.6%.
Compared to the April forecast of 1.9%, this represents a 1.3 percentage point increase over five months. The growth forecast for next year has also been raised from 2.0% to 2.3%, marking two consecutive increases from the April estimate of 1.9%.
ADB cited the increase in AI semiconductor exports, expansionary fiscal policies, and strong corporate performance contributing to the recovery in private consumption as reasons for the upward revision. The manufacturing sector indicators, such as the Purchasing Managers' Index (PMI) and Business Sentiment Index (BSI) for July and August, also showed robust trends, supporting this adjustment.
However, external uncertainties are identified as downside risks to growth. Heightened geopolitical tensions and potential increases in tariffs by the United States could dampen exports and investment.
The inflation forecast for South Korea this year remains at 2.7%, consistent with the July estimate. While rising international energy prices and strong domestic demand are expected to exert inflationary pressures, the government's price stabilization policies are anticipated to mitigate some of these effects.
The inflation forecast for next year is also maintained at 2.2%, reflecting expectations of easing energy price pressures and the effects of tightening monetary policy.
The ADB projects a growth rate of 5.0% for developing countries in the Asia-Pacific region this year, which is 0.1 percentage points higher than in July but lower than the April forecast of 5.1%. Factors contributing to this growth include increased private investment, government stimulus measures, and strong exports in AI-related industries. The growth forecast for next year remains at 5.1%.
Among major countries, Taiwan's growth forecast has been raised from 9.5% to 11.0%, while Singapore's has increased from 3.2% to 5.0%. Vietnam's forecast has risen from 7.2% to 7.8%, and India's from 6.6% to 7.0%. China and Japan's growth forecasts remain unchanged at 4.6% and 0.7%, respectively.
The inflation forecast for developing countries in the Asia-Pacific region is projected at 4.2%, which is 0.1 percentage points lower than previously estimated, reflecting demand slowdown due to price stabilization measures in China and South Asian countries. For next year, the inflation forecast has been raised from 3.4% to 3.5%, considering the prolonged impact of the El Niño phenomenon on economic activity.
* This article has been translated by AI.
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