IMF cuts South Korea’s 2023 economic growth estimate to 1.7% from 2%

IMF cuts South Korea’s 2023 economic growth estimate to 1.7% from 2% [Photo by Yonhap]

The International Monetary Fund on Tuesday revised down its 2023 economic growth outlook for South Korea to 1.7 percent amid global uncertainties from interest rate hikes in major economies and the ongoing war between Russia and Ukraine.

But the Washington-based organization did not specify the basis for its outlook adjustment for South Korea, according to the country’s economy and finance ministry.

In contrast, the IMF revised up its growth forecast for the global economy this year by 0.2 percentage point to 2.9 percent, citing the reopening of the Chinese economy and stronger than expected consumption and investment in the U.S. and Europe.

The downward revision for South Korea marked a 0.3 percentage-point drop from its previous forecast of 2 percent made in October. The IMF also cut next year’s growth estimate for Asia’s fourth largest economy to 2.6 percent from the previous forecast of 2.7 percent.

The updated outlook for this year is on par with the Bank of Korea’s estimate and above South Korea’s finance ministry’s forecast of 1.6 percent and Asian Development Bank’s 1.5 percent.