IMF lowers S. Korea's 2025 growth outlook to 0.8% on global trade uncertainty

International Monetary Fund logo is seen inside the headquarters at the end of the IMF/World Bank annual meetings in Washington, Oct. 9, 2016. Reuters-Yonhap

The International Monetary Fund (IMF) on Tuesday revised down its growth forecast for South Korea's economy to 0.8 percent for 2025, citing lingering global uncertainty despite the potential easing of U.S. tariff measures.

In its latest World Economic Outlook (WEO) report, the IMF trimmed its projection for Asia's fourth-largest economy by 0.2 percentage point from its previous forecast released in April. Meanwhile, the IMF revised its 2026 outlook for South Korea upward by 0.4 percentage point to 1.8 percent.

"Risks to the outlook are tilted to the downside, as they were in the April 2025 WEO," the IMF said. "On the upside, global growth could be lifted if trade negotiations lead to a predictable framework and to a decline in tariffs."

Major economies have recently reached agreements with the administration of U.S. President Donald Trump, aimed at scaling back Washington's "reciprocal" tariffs and sector-specific duties. Seoul officials have also been accelerating their diplomatic outreach to clinch a last-minute deal as the U.S. is set to start imposing reciprocal tariffs Friday.

The IMF's latest forecast for South Korea is slightly more pessimistic than, or roughly in line with, projections from other major economic institutions.

The Organization for Economic Cooperation and Development (OECD) projects a 1 percent expansion for the South Korean economy in 2025, while the Bank of Korea (BOK), the Asian Development Bank (ADB) and the state-run Korea Development Institute (KDI) have each forecast 0.8 percent growth.

The IMF emphasized the need for nations to reduce policy-driven uncertainty by establishing transparent and consistent trade frameworks.

"Pragmatic cooperation is paramount in instances in which some rules of the international trading system, in their current form, may not be functioning as intended," the report said. "This entails the pursuit of multilateral initiatives on the global commons and modernizing trade rules."

Meanwhile, the IMF revised up its global growth forecast to 3 percent for 2025, up 0.2 percentage point from its earlier projection.