ADB keeps 2.2% growth for Korea in 2024

[Source: Ministry of Economy and Finance]

The Asian Development Bank (ADB) forecast South Korea‘s economic growth at 2.2 percent in 2024 and inflation at 2.5 percent, maintaining its previous forecast.

According to the Ministry of Economy and Finance on Thursday, the ADB released its Asian Economic Outlook 2024 on the same day, which predicted Korea’s real gross domestic product (GDP) growth rate to be 2.2 percent in 2024. The figure is the same as the previous forecast in December 2023, and Korea‘s growth rate for 2025 is forecast at 2.3 percent.

While the projected inflation rate for 2024 remains at 2.5 percent, the ADB forecasts a drop to 2 percent the following year.

Commenting on the artificial intelligence (AI) boom driving the rebound in Asia’s semiconductor industry, the ADB stated that Korea “is seeing rapidly growing AI-related demand for memory chips, for which it is a leading global manufacturer.”

The organization forecasts overall growth in Asia of 4.9 percent in 2024, up 0.1 percentage point from its December 2023 forecast, as a recovery in semiconductor exports and India’s investment-led growth provide solid momentum despite China‘s slowdown. However, the region’s inflation rate is expected to gradually decline to 3 percent in 2025 from 3.2 percent the year before.

The ADB cited escalating conflicts, geopolitical tensions, U.S. monetary policy, and the impact of adverse weather-related events as the region’s pressure points.