Key facts
- The Asian Development Bank (ADB) raised its 2026 economic growth forecast for South Korea to 3.2% from 2.6%.
- The ADB also increased its 2027 growth outlook for South Korea to 2.3% from 2.0%.
- The revised forecast is driven by strong exports amid high global demand for AI chips, expansionary fiscal policy, and robust corporate earnings.
- Potential risks include rising geopolitical tensions, financial market volatility, and U.S. tariff hikes.
- The ADB maintained its 2026 inflation forecast for South Korea at 2.7% and for 2027 at 2.2%.
The Asian Development Bank (ADB) on Wednesday raised its 2026 economic growth forecast for South Korea to 3.2 percent, an increase from the 2.6 percent projected in July. The Manila-based bank also lifted its 2027 growth outlook for Asia's fourth-largest economy by 0.3 percentage point to 2.3 percent.
The ADB attributed the revised forecast to South Korea's expanding exports, driven by soaring global demand for AI chips. The bank also noted that the country's expansionary fiscal policy and robust corporate earnings are supporting a gradual recovery in private consumption.
However, the ADB cautioned that potential risks to the forecast include escalating geopolitical tensions, increased volatility in global financial markets, and possible additional U.S. tariff hikes, which could negatively impact exports and investment.
The ADB maintained its inflation forecast for South Korea, predicting consumer prices will likely rise 2.7 percent year-on-year in 2026 and 2.2 percent in 2027. The bank stated that government efforts to control consumer prices are expected to partially counteract inflationary pressures stemming from higher global energy prices and stronger domestic demand.