IMF raises South Korea's growth forecast for this year to 2.6%

The International Monetary Fund (IMF) has raised South Korea’s economic growth forecast for this year from 1.9% to 2.6%. The government explained that this is a 0.7 percentagepoint increase from its forecast in April, the largest upward revision among the 30 major countries. The IMF cited the increase in semiconductor exports as the main reason for the upward revision. South Korea’s exports in the first half of this year rose sharply compared with the same period last year, and semiconductor exports in particular surged, contributing to a larger trade surplus. The IMF also raised South Korea’s growth forecast for next year from 2.3% to 2.7%. However, the IMF said downside risks remain significant for the global economy as a whole. It slightly lowered this year’s global growth forecast and also revised growth forecasts for advanced economies and some regions. The report warned that if expectations for artificial intelligence (AI) weaken, consumption and financial markets could contract, and it also pointed to the need for monetary policy centered on price stability and selective fiscal support.