IMF maintains Korea’s 2024 economic growth outlook at 2.3%

The International Monetary Fund (IMF) kept its outlook for Korea’s economic growth this year unchanged at 2.3 percent, Tuesday, from its previous forecast announced in January.

The IMF’s updated outlook for Asia’s fourth-largest economy is higher than estimates by the Ministry of Economy and Finance, which forecast 2.2 percent growth, and also the Bank of Korea (BOK), which projected a 2.1 percent expansion.

It is also higher than a 2.2 percent growth forecast announced by the Organization for Economic Cooperation and Development (OECD) the Asian Development Bank (ADB).

While the U.S.-headquartered IMF did not explain why it kept the forecast for Korea steady, economists in Seoul assessed that the projection is related to the country’s export rebound.

In a press release, the Ministry of Economy and Finance underscored that the IMF’s economic outlook for Korea is “at a high level” compared to those of many advanced economies.

The IMF predicted a moderate recovery for the global economy, noting that upward and downward pressures on its growth are balanced.

It slightly revised up this year’s world economic outlook to 3.2 percent from 3.1 percent.

Concerning upward pressure, the IMF referred to expansionary fiscal policies, earlier-than-expected rate cuts, production increases driven by artificial intelligence (AI) and government reforms.

Regarding downward pressure, it referred to the spread of geopolitical risks, high household debt due to costly borrowing rates and a slowdown in the Chinese economy.

The IMF predicted that advanced economies will expand 1.7 percent this year, up from its previous forecast of 1.5 percent.

The growth outlook for the United States was raised to 2.7 percent from 2.1 percent, while the forecast for China remained steady at 4.6 percent.

The projections for Japan and Italy also remained unchanged at 0.9 percent and 0.7 percent.

The IMF revised down forecasts for several wealthy countries, with Germany’s outlook slipping by 0.3 percentage point to 0.2 percent.

France’s growth outlook inched down 0.3 percentage point to 0.7 percent, while the projection for the U.K. slid 0.1 percentage point to 0.5 percent and Canada fell 0.2 percentage point to 1.4 percent.

Meanwhile, an inflation outlook for the world and major economies, including Korea, was not given.

Along with private spending, Korea’s exports increased for the sixth straight month in March.

Outbound shipments gained 3.1 percent year-on-year to $56.5 billion last month, according to data compiled by the Ministry of Trade, Industry and Energy.

Imports decreased 12.3 percent year-on-year to $52.2 billion last month, resulting in a trade surplus of $4.28 billion.

Korea accordingly maintained a trade surplus for 10 consecutive months.