The Asian Development Bank (ADB) has projected that South Korea's economy will grow by 2.6% this year, boosted by increased exports driven by rising global demand for artificial intelligence (AI). On July 9, the ADB raised its growth forecast by 0.7 percentage points from its previous estimate in April. The bank also adjusted its forecast for next year’s growth to 2.0%, an increase of 0.1 percentage points.
The ADB anticipates that the growth in exports, fueled by the global demand for AI, will support South Korea's economic expansion this year and into next year. However, it noted that rising energy prices and supply chain disruptions could hinder growth, although strong semiconductor performance is expected to offset some downward pressures.
Consumer spending is expected to stabilize due to rising stock markets, strong performance from information technology companies, and government support policies. The ADB identified long-term energy supply disruptions, the re-imposition of U.S. tariffs, and potential stock market corrections as risks to economic growth.
In a related forecast, the ADB also raised its growth estimate for Taiwan to 9.5% this year. Other countries in the Asia-Pacific region, such as Hong Kong (3.0%) and Singapore (3.2%), are also expected to maintain growth rates above 3%.
In contrast, Japan (0.7%) and Australia (2.0%) are maintaining their previous growth forecasts, while New Zealand's growth estimate has been lowered by 0.3 percentage points to 1.6% compared to April.
The ADB predicts that South Korea's inflation rate will rise to 2.7% this year and 2.2% next year, reflecting a 0.4 and 0.2 percentage point increase from the April forecasts, respectively, due to the pass-through of international energy price increases to consumer prices.
For developing countries in the Asia-Pacific region, the ADB forecasts a growth rate of 4.9%, a decrease of 0.2 percentage points from April. The ongoing energy price increases and prolonged supply chain disruptions stemming from conflicts in the Middle East are expected to hinder growth. However, the impact of these conflicts is anticipated to diminish, with the economic growth rate projected to remain at 5.1% in 2027.
The inflation rate for developing countries in the Asia-Pacific region is expected to be 4.3% this year, an increase of 0.7 percentage points from the previous forecast, while next year's inflation rate is expected to remain unchanged at 3.4%.
* This article has been translated by AI.
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