IMF Slashes Korea's Economic Growth Outlook

  • By Kim Sung-mo

    April 12, 2023 11:00

    The International Monetary Fund in a global report on Tuesday slashed its economic growth forecast for Korea from 1.7 percent to 1.5 percent this year.
    In October last year, the IMF still forecast that Korea's economy would grow two percent. The IMF's latest projection is a tad lower than the forecasts by the Korean government (1.6 percent), Bank of Korea (1.6 percent) and Korea Development Institute (1.8 percent).
    The IMF did not give a reason for slashing the outlook, but Chang Jae-chul at KB Kookmin Bank said, "Exports remain lackluster, while the effects of a reopening of the Chinese market are still minimal, residential property prices keep falling and interest rates are high."
    The IMF also cut its global economic forecast for this year by 0.1 percentage point to 2.8 percent, predicting a "rocky recovery."
    It raised the outlook for U.S. growth from 1.4 percent to 1.6 percent but lowered the forecast for Japan by 0.5 percentage point to 1.3 percent. China's outlook was kept unchanged at 5.2 percent.
    The IMF said each country should strengthen monitoring of market unrest and continue a tight monetary policy until inflation falls. "This may call for monetary policy to tighten further or to stay tighter for longer than currently anticipated," it warned.
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