UN Projects 2.7% Global Economic Growth This Year... South Korea Forecast at 1.8%

Slight Slowdown Compared to Last Year
Growth Expected to Rebound in 2027

The United Nations (UN) has projected that the global economy will grow by 2.7% this year.

Last November, containers piled up at Pyeongtaek Port in Gyeonggi Province. Photo by Yonhap News

In its World Economic Situation and Prospects report released on January 8 (local time), the UN forecasted that the global economic growth rate for this year would be 2.7%, a slight slowdown compared to the 2.8% projected for 2025. However, the organization expects the growth rate to rebound to 2.9% in 2027.

By country, the report forecasts that the United States will see economic growth of 2.0% in 2026 and 2.2% in 2027. For South Korea, the expected economic growth rates are 1.8% in 2026 and 2.0% in 2027. The Bank of Korea, in its economic outlook report released in November last year, projected growth of 1.8% in 2026 and 1.9% in 2027.

The report stated, "Despite tariff shocks, global economic activity has shown resilience," and analyzed that "advance orders and inventory accumulation prior to tariff imposition, robust consumption, monetary policy easing, and a stable labor market have supported this resilience." It further noted, "Continued macroeconomic policy support is expected to absorb the impact of tariff increases," and observed that "trade growth and overall trading activity are likely to moderate in the short term."

The report also pointed out that recent inflationary conditions have revealed structural issues, such as delayed wage increases and uneven transmission of overseas price fluctuations to domestic prices. As a result, inflationary pressures have persisted, and it analyzed that short-term demand management policies alone have limitations in curbing inflation when real wages and incomes are declining.

The report stated, "Policies to protect vulnerable groups, even if temporary, may prove effective. However, broad subsidies that impose a heavy fiscal burden and cause economic distortions are not desirable," adding, "In a high-inflation environment, fiscal consolidation within the scope of maintaining essential expenditures can enhance policy effectiveness." It further recommended, "In the medium to long term, improving the efficiency of public spending is necessary to restore policy capacity and establish a fiscal system capable of responding to crises."