IMF Sees Higher Global Growth But Slashes Korea's Outlook

The International Monetary Fund on Tuesday slashed its economic growth outlook for Korea this year from two percent to 1.7 percent.

At the same time the IMF raised its global outlook for this year from 2.7 percent to 2.9 percent on hopes for China's reopening and increasing spending in the U.S. and Europe.

The IMF did not explain why it slashed Korea's outlook, but the move appears to reflect concerns that slow exports and weak private spending here will not improve this year.

An official at the Ministry of Economy and Finance said, "Korea's economic growth rate was not good in the fourth quarter of last year and that performance is expected to have an impact until early this year."

Among 30 countries whose economic outlook the IMF assessed, 11 have been adjusted downwards, including Australia (0.3 percent), Indonesia (0.2 percent), Spain (0.1 percent) and the U.K. (0.9 percent).

But forecasts improved for 10 countries including China (up 0.8 percent) and the U.S. (up 0.4 percent).

According to the Bank of Korea, Korea's economy shrank 0.4 percent on-quarter in the last three months of 2022, the first contraction in two-and-a-half years amid a global economic slowdown and plunging exports and consumer spending.