The International Monetary Fund (IMF) has raised its growth forecast for South Korea this year, projecting an economic growth rate of 1.9%, a slight upward revision from its previous estimate.
On January 19, the Ministry of Economy and Finance announced that the IMF, in its "World Economic Outlook" released in January 2026, forecast South Korea's growth rate for this year at 1.9%. This figure is 0.1 percentage point higher than the 1.8% forecast made in October of last year.
The IMF releases economic outlooks for all member countries every April and October, and provides revised forecasts for the 30 major economies in January and July. Since July of last year, the growth forecast for South Korea has been continuously revised upward.
The Ministry of Economy and Finance explained that the IMF's growth forecast for South Korea this year is higher than the average for advanced economies, which stands at 1.8%.
However, the IMF's forecast is somewhat lower than projections by the government or the Organisation for Economic Co-operation and Development (OECD). The government, in its economic growth strategy announced on January 9, projected a 2.0% growth rate for this year, while the OECD's forecast in December of last year was 2.1%. As of this month, the average forecast by major investment banks stands at 2.0%.
The Bank of Korea's forecast is lower, at 1.8%. On January 15, Bank of Korea Governor Rhee Changyong stated, "The 1.8% forecast presented in November of last year is generally expected to hold," adding, "We believe the upside risks have increased somewhat."
This upward revision is attributed to improved exports driven by a recovery in the semiconductor sector, as well as a gradual rebound in domestic demand that has been evident since last year.
The IMF projected South Korea's economic growth rate for next year at 2.1%, which is 0.1 percentage point lower than its previous forecast. This figure is higher than the United States' growth forecast of 2.0% for next year.
Additionally, South Korea's growth rate for last year was revised upward by 0.1 percentage point to 1.0%.
Regarding global inflation, the IMF projected that the upward trend would slow, with the rate falling from 4.1% last year to 3.8% this year, due to factors such as declining energy prices. However, it analyzed that inflation trends would differ by country.
For the United States, the IMF noted that tariff increases are likely to be passed on to prices, making it difficult to achieve the 2% inflation target in the near term. For China, it projected that the currently low inflation rate would gradually come under upward pressure.
The IMF assessed that downside risks still predominate in the global economy. Major risk factors include concentrated investment in certain artificial intelligence (AI) and high-tech companies, persistent trade uncertainty and geopolitical tensions, as well as high debt levels in major economies.
In particular, the IMF warned that if expectations for productivity and profitability related to AI weaken, asset prices could undergo sharp adjustments, potentially spreading financial instability.
However, the IMF added that if trade tensions gradually ease and countries succeed in boosting medium-term productivity through the adoption of AI, these factors could serve as upside drivers for the global economy.
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