South Korea’s Economic Growth Forecast at 2% for Next Year

SEOUL – Reports on Sunday forecast that South Korea's economy is expected to grow by an average of 2 percent next year. The projection comes amidst anticipated weak domestic demand, despite a gradual recovery in exports.

According to Yonhap News Agency, These forecasts align closely with the Bank of Korea's recent prediction of 2.1 percent growth but fall short of the government's 2.4 percent growth estimate made in July. Various local and international think tanks, including the state-run Korea Development Institute and the Korea Institute for Industrial Economics, have projected growth rates of 2.2 percent and 2 percent, respectively. The Korea Institute of Finance has predicted a growth rate of 2.1 percent.

International institutions like the International Monetary Fund, the Asian Development Bank, and the Organization for Economic Cooperation and Development have averaged their growth projections for South Korea at 2.2 percent. These institutions expect the South Korean economy to benefit from a rebound in the global chips industry and China's economic recovery, but they also highlight potential risks associated with increasing household and corporate debts.

Contrastingly, private think tanks and securities firms have provided more conservative growth outlooks. A combined forecast from key institutions, including the Hyundai Research Institute, LG Economic Research Institute, and Woori Finance Research Institute, averages at 2 percent. Additionally, inflation projections for South Korea by these 20 institutions are averaged at 2.6 percent for 2024, aligning with the central bank's prediction.

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