This year, South Korea is expected to record a growth rate lower than that of Japan. The International Monetary Fund (IMF) has maintained its earlier projection of 1.4 percent for South Korea’s growth rate this year. Japan’s growth rate projection for this year has risen to 2.0 percent, expected to be 0.6 percentage points higher than South Korea’s. This marks that Japan is set to surpass South Korea in terms of economic growth for the first time in 25 years since the Asian financial crisis of 1998.
According to the Ministry of Economy and Finance on Oct. 10, the IMF maintained its previous projection for South Korea’s economic growth rate for this year at 1.4 percent in its latest World Economic Outlook released on the same day. Despite lowering South Korea’s growth rate projections five times consecutively from July and October last year to January, April, and July this year, the IMF has chosen to keep the existing forecast this time.
Japan’s economic growth rate has been revised upward from 1.4 percent to 2.0 percent, showing a 0.6 percentage point increase. If these projections hold, South Korea is poised to record an economic growth rate lower than Japan’s for the first time since the Asian financial crisis.
It is predicted that South Korea’s real gross domestic product (GDP) growth rate for next year will reach 2.2 percent. This figure is 0.2 percentage points lower than the previous projection of 2.4 percent presented in July. The decrease is even more pronounced compared to the global economic growth rate projection for next year, which decreased from 3.0 percent to 2.9 percent.
The IMF’s projection aligns with the forecasts of the Bank of Korea and the Asian Development Bank (ADB) but is lower than the government’s projection of 2.4 percent. However, it is slightly higher than the forecast of the Organization for Economic Co-operation and Development (OECD) at 2.1 percent.
The global economic growth rate for this year is projected to remain at 3.0 percent, unchanged from previous estimates. On a country-by-country basis, the growth projections for the United States have been revised upward from 1.8 percent to 2.1 percent, France from 0.8 percent to 1.0 percent, and the United Kingdom from 0.4 percent to 0.5 percent. However, China has seen downward revisions in its growth forecasts from 5.2 percent to 5.0 percent, Italy from 1.1 percent to 0.7 percent, and Germany from -0.3 percent to -0.5 percent.