Korean media: IMF forecasts South Korea's economic growth rate at 2.6% this year… Upgraded by 0.7 percentage points within three months due to semiconductor boom
Joining Taiwan, Thailand, and Malaysia as one of the "four major AI export economies"
The International Monetary Fund (IMF) forecasts South Korea's economic growth rate for this year at 2.6%. Thanks to the strong surge in semiconductors offsetting the negative impact of the Middle East conflict, the IMF has raised its forecast by 0.7 percentage points from April’s projection (1.9%). Next year’s growth rate is also expected to reach 2.5%, up 0.4 percentage points from the estimate three months ago.
In its “World Economic Outlook Update” released on the 8th, the IMF made the above projections, stating: “This is driven by robust external demand for semiconductors, which mitigated the adverse effects of the war.” The IMF’s current forecast for South Korea’s economic growth aligns with recent projections from major institutions such as the OECD and the Bank of Korea.
The IMF has categorized South Korea alongside Taiwan, Thailand, and Malaysia as among the top four economies globally specializing solely in AI hardware exports. Despite high dependence on energy imports from the Middle East, South Korea achieved a year-on-year growth rate of 7.5% in the first quarter (January–March), calculated based on the assumption that the growth trend observed in the previous quarter continues over a full year—more than four times the April forecast (1.8%)—thanks to strong performance in semiconductor and AI exports.
The IMF forecasts global economic growth at 3% for this year, down 0.1 percentage point from the estimate three months ago. For next year, the projected growth rate is 3.4%, up 0.2 percentage points from the April forecast. The IMF noted: “The acceleration of the global technology cycle (business cycle) driven by the development and widespread adoption of artificial intelligence (AI) has generated demand-led momentum that partially offsets the impact of the Middle East conflict.” The IMF assessed that national growth trajectories will differ depending on countries’ exposure to the Middle East conflict and whether they are integrated into AI technology production and supply chains.
The IMF has revised downward its growth forecast for Japan this year from 0.7% (April estimate) to 0.6%. Although the Japanese government has provided fiscal support, the IMF notes that the energy shock triggered by the war has had a greater impact. However, the IMF stated: “With the energy shock expected to ease next year, Japan’s growth is likely to rebound slightly to 0.7%.” The IMF maintains its forecast for U.S. economic growth at 2.3% this year, unchanged from the April projection. For next year, the forecast stands at 2.2%, up 0.1 percentage point from the April estimate (2.1%). The IMF remarked: “Given that the United States is a net energy exporter, the impact of the war should be limited.”
However, the IMF’s current projections assume that maritime disruptions in the Strait of Hormuz have eased since mid-month, and that energy supply and logistics conditions will return to pre-war levels by early next year. The IMF cautioned: “We must remain vigilant toward risks such as uncertainty in the Middle East situation, trade fragmentation, and weakened policy space in some countries.” Regarding AI, the IMF commented: “While increased efficiency can boost economic growth, a reversal of expectations could instead become a downward factor suppressing consumption and financial stability.” The IMF also emphasized that maintaining price stability should be the primary focus when formulating monetary policy. On fiscal policy, it called for temporary and targeted measures centered on vulnerable groups.
Source: Chosun Ilbo
Original article: toutiao.com/article/1870208192794632/
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