The Organization for Economic Cooperation and Development (OECD) has raised its economic growth forecast for South Korea to 3.7%, marking the largest upward adjustment among the G20 nations.
According to the Ministry of Economy and Finance on September 23, the OECD announced its interim economic outlook, adjusting South Korea's growth rate for 2026 upward by 1.1 percentage points from June. The forecast for next year was also revised up by 0.7 percentage points to 2.6%.
The OECD stated, "Strong exports and production growth are driving South Korea's economy, and a gradual recovery in consumption is expected to continue next year."
Inflation rates are projected to remain below the G20 average for both this year and next. The forecast for 2026 is set at 3.0%, and for 2027 at 2.7%, both up by 0.4 and 0.5 percentage points, respectively, from previous estimates. This increase is attributed to the significant rise in growth forecasts and higher expectations for international energy prices compared to June.
The global economy is expected to grow by 2.9% this year and 3.0% next year. Analysts suggest that governments are responding swiftly to the impacts of the Middle East conflict, which has mitigated negative shocks to the economy.
Additionally, the spread of artificial intelligence (AI) is seen as supporting global investment, production, and trade. The inflation rates for G20 countries have been adjusted upward to 4.1% for this year and 3.6% for next year, considering the higher international energy prices since June.
The OECD anticipates that the current high international energy prices will stabilize after the fourth quarter of this year. However, it identified ongoing energy price increases, supply shocks due to adverse weather conditions like El Niño, and potential rises in long-term bond yields as significant downside risks. Conversely, a swift resolution to the Middle East conflict could act as an upside factor.
While the spread of AI may provide additional upward momentum in investment and production, the OECD cautioned that concerns about profitability for related companies and high leverage dependence should be closely monitored.
Finally, the OECD recommended monetary policies aimed at stabilizing expected inflation and selective, temporary energy support measures. It emphasized the need for structural reforms to enhance potential growth and strengthen resilience against supply shocks.
* This article has been translated by AI.
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