The International Monetary Fund (IMF) sharply revised up growth outlook for South Korea to 4.3 percent for this year and 3.6 percent for next year while leaving the global forecast unchanged.
In the latest World Economic Outlook report published on Tuesday, the IMF projected Korean economy to grow 4.3 percent this year, up from 3.6 percent estimated in April. For next year, the estimate was raised to 3.4 percent from 2.8 percent, the Ministry of Finance and Economy said citing the report.
IMF’s number is most sanguine among global institutions.
The Asia Development Bank forecast the Korean economy to grow 4.0 percent and the Organization for Economic Cooperation and Development 3.8 percent in 2021. The Korean government set 4.2 percent and the Bank of Korea 4.0 percent for this year’s growth target.
Seven out of total 30 countries reviewed by the IMF had their growth estimates revised upwards both for this year and next. Korea is one of the seven.
IMF’s latest projection, however, was based on Korea’s economic conditions only up until the second week of July before the country’s Covid-19 infections resurged. Korea is now into the fourth wave of Covid-19 with delta variant infections rapidly spreading across the country and social distancing measures lifted to the highest levels.
For the global economy, the IMF projected a 6.0 percent growth for this year, unchanged from its earlier projection made in April. It, however, expected the global economic recovery pace would differ by countries. The growth outlook for advanced economies was revised up by 0.5 percentage point to 5.6 percent, while the estimate for developing economies was marked down by 0.4 percentage point to 6.3 percent.
The IMF, meanwhile, revised down its estimate for Korea’s debt-to-GDP levels.
It forecast Korea’s general government debt (D2)-to-GDP ratio to reach 51.8 percent this year, down 1.3 percentage points from its April estimate.
The organization maintained its estimate for Korea’s fiscal deficit to GDP at 2.9 percent.
By Cho Jeehyun
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