Korea's 2025 growth outlook at 1.6% due to US trade policy uncertainties: AMRO

Comtainers are stacked at a port in Busan, April 1. Newsis

A regional macroeconomic research agency on Tuesday projected Korea's economy to grow 1.6 percent this year, citing growing uncertainties in global trade due to escalating U.S. protectionist measures.

The ASEAN+3 Macroeconomic Research Office (AMRO) released its latest regional outlook report, which includes growth and inflation forecasts for the ASEAN+3 region, comprising the 10 member states of the Association of Southeast Asian Nations (ASEAN), as well as Korea, China and Japan.

AMRO's growth outlook for Asia's fourth-largest economy is slightly more optimistic than the 1.5 percent forecasts by the Organization for Economic Cooperation and Development (OECD) and the Bank of Korea (BOK), although it is on par with the Korea Development Institute's projection.

The agency warned of increased downside risks, noting that the U.S.' strengthened protectionist policies could dampen regional growth by disrupting global trade flows.

AMRO also cited tightening global financial conditions, a slowdown in major economies and surging commodity prices as short-term headwinds.

Over the longer term, the agency identified population aging, climate change and technological disruptions as key structural challenges for the region.

Inflation in Korea is expected to remain stable at 1.9 percent in 2025, supported by steady domestic food prices and declining global energy costs, the agency said.

The assessment was based on policy consultations conducted with Korean officials in November last year.