[News in Numbers] "South Korea's Economic Growth Rate Next Year Expected to Be Lower Than This Year" Projected at 2.0%

There is an analysis that South Korea's economic growth rate in 2025 will be lower than this year. Following global investment banks (IBs) lowering their growth forecasts for South Korea this year, domestic institutions are also lowering their expectations for the country's economic growth rate. In particular, concerns have emerged that due to increased external uncertainties stemming from the outcome of the U.S. presidential election next year, South Korea's economic growth rate could fall to as low as 2.0%.

The Korea Institute of Finance presented a forecast of 2.2% for this year's domestic gross domestic product (GDP) growth rate at the '2025 Economic and Financial Outlook Seminar.' The institute had previously revised its 2024 economic growth forecast upward from 2.1% to 2.5% in May but has now lowered it again to 2.2%.

For next year, it expects an even lower growth rate of 2.0%, anticipating a slowdown in growth.

While domestic demand may improve somewhat, construction investment and exports are expected to weaken, leading to a decline in the overall economic growth rate. Additionally, due to geopolitical risks, uncertainties related to the U.S. Trump administration's policies, and the possibility of a stronger dollar, inflation is seen as having greater upside risks than downside risks.

Earlier, domestic securities firms also lowered their forecasts for South Korea's economic growth rate next year. Hana Financial Management Research Institute predicted that South Korea's economic growth rate in 2025 would be 2.1%, lower than this year's 2.5%. Their analysis projects a decline from 2.8% in the first half of 2024 to 2.1% in the second half, further dropping to 1.9% in the first half of next year before rebounding to 2.3% in the second half.

IBK Investment & Securities also forecast South Korea's economic growth rate around 2% for next year. Researcher Jeong Yong-taek of IBK Investment & Securities stated in a report, “The main driver behind the adjustment of the 2025 economic growth rate is concerns over the export market adjustment. However, considering the growth rate adjustments forecasted for the U.S. and China, the slowdown will not be significant, and the growth rate will remain around 2%.”

Recently, the International Monetary Fund (IMF) also projected in its 'October World Economic Outlook' that South Korea's economy will grow by 2.5% this year and 2.2% next year.