ADB ups 2025 growth forecast for Korea to 0.9% on consumption recovery, tariff deal
Myeongdong Street in central Seoul, a popular shopping district, is bustling with people, Nov. 25. Yonhap
The Asian Development Bank (ADB) has revised up its growth outlook for Korea this year to 0.9 percent following the country's stimulus packages to boost consumption and tariff deal with the United States, Seoul's finance ministry said Wednesday.
The figure marks a 0.1 percentage point increase from the ADB's previous forecast made in September.
The ADB also raised Korea's growth outlook for next year by 0.1 percentage point to 1.7 percent, according to the Ministry of Economy and Finance.
The revised outlooks broadly align with forecasts from other major institutions. The Organization for Economic Cooperation and Development (OECD) has forecast 1 percent growth for this year and 2.1 percent for 2026. The Bank of Korea recently lifted its growth forecast for the country to 1 percent for 2025 and 1.8 percent next year.
The ministry said the ADB made the revision considering the recent recovery in domestic consumption led by the government's economic stimulus packages and eased uncertainties surrounding exports on the Korea-U.S. trade deal and robust semiconductor demand.
In late October, Seoul and Washington finalized their trade deal, with the latter lowering tariffs on Korean cars to 15 percent in exchange for Korea's $350 billion investment commitment.
The ADB, however, cited persisting downside risks stemming from the weakness in the real estate market and lingering global trade and geopolitical uncertainties.
For inflation, the ADB suggested 2.1 percent growth for both this year and next year, up 0.2 percentage point from previous forecasts on the continued increase in food and oil prices, as well as the recent weakness of the Korean won.
The ADB issues its regional economic outlook four times a year. Its assessments cover 49 member economies in the Asia-Pacific region, excluding Japan, Australia and New Zealand.