Korea's export growth rate to fall to zero-percent range in 2023: IMF

Krishna Srinivasan, right, director of the Asia and Pacific Department at the International Monetary Fund (IMF), speaks during a press conference held at the Bank of Korea in central Seoul, Tuesday. Yonhap

By Anna J. Park

A senior official at the International Monetary Fund (IMF) said despite Korea's solid economic fundamentals, the country's export growth rate is expected to fall to the zero-percent range in 2023, from around the three-percent level this year, due to economic slowdowns in major countries and a decrease in global demand.

The forecast was made by Krishna Srinivasan, director of the Asia and Pacific Department at the IMF, during his visit to Seoul on Tuesday.

At a press conference held at the Bank of Korea (BOK) in Seoul, Srinivasan said that the Korean economy is estimated to have solid fundamentals, and that the country has been taking proper measures that guarantee smooth market operations at its stock, bond and foreign exchange markets in case of external shocks. He also said the Korean economy's external indices show sound and stable conditions, as seen in its volumes of current account and net external assets.

However, he warned that the Korean economy is facing a trade-off between growth rates and inflation. Despite the trade-off relationship, he said he thinks the BOK should squarely counter rising inflation, because without taking such measures, the country's expected inflation will continue to rise. He added that he expects Korea's consumer prices to peak within this year, and will fall back to a target level around 2024.

He also said decreasing import demand from the U.S. and European countries from next year would result in Korea's year-on-year export growth rate declining to the zero-percent range, from around the three-percent level this year.

The IMF forecasts the Korean economy to grow 2.6 percent this year and two percent in 2023, while the growth forecast for the Asia-Pacific region is four percent for this year and 4.3 percent for next year.