The International Monetary Fund (IMF) lowered its growth outlook for South Korea for this year from 3 percent to 2.8 percent and for next year from 2.9 percent to 2.6 percent.
The IMF released the World Economic Outlook report, which presents the IMF’s analysis and projections of economic developments of major countries in the world, on Oct. 9 (local time). The agency presented South Korea’s growth projection for the first time in eight months after announcing the annual conference report with the South Korean government in February. It excluded South Korea in the World Economic Outlook report announced in July.
The IMF predicted that the global economy would grow at 3.7 percent in 2018 and 2019, down 0.2 percentage point from its earlier estimates in July. The agency said its downward revisions reflect the negative effect of escalating trade tensions between the United States and China and volatile financial markets of emerging economies due to a rise in interest rates in the U.S. However, it said that the global economy would continuously show an upward trend, saying, “The economy has continued to expand from mid-2016 and the growth rate for 2018 to 2019 will also remain at the highest level after 2010 and 2011.”
The IMF maintained the growth outlook for advanced countries for this year at 2.4 percent, the same with its earlier estimates in July, and downgraded the figure for next year from 2.2 percent to 2.1 percent. The agency also maintained the growth projection for the U.S. for this year at 2.9 percent, while it lowered the expectations for the Eurozone, which consists of 19 member states that use the euro, from 2.2 percent to 2 percent owing to poor performance in the first half of the year. The IMF also downgraded the growth outlook for emerging countries for this year from 4.9 percent to 4.7 percent as well as the projection for next year from 5.1 percent to 4.7 percent.
In addition, the Organization for Economic Cooperation and Development (OECD) lowered South Korea’s growth projection from 3 percent to 2.7 percent in the intermediate-term economic outlook, and the Asian Development Bank (ADB) adjusted the figure from 3 percent to 2.9 percent last month. The world’s three biggest economic outlook organizations all predicted South Korea’s growth projection for this year at some 2 percent. Both the ADB and the OECD presented 2.8 percent of the growth outlook for South Korea for next year, which was slightly higher than the IMF. Domestic economic research institutes also lowered the nation’s growth projection for this year by 0.1 to 0.2 percent points to 2.8 percent to 2.9 percent and predicted some 2 percent for next year.