Doha:the Asian Development Bank (ADB) has increased South Korea's 2026 economic growth forecast to 3.2%, up from the 2.6% estimated in July. This adjustment is attributed to strong exports and corporate earnings amidst the AI boom.
According to Qatar News Agency, The ADB's recent estimate represents a 0.6% rise from its previous report. The bank also adjusted its 2027 growth outlook for South Korea, Asia's fourth-largest economy, by 0.3% to 2.3%. Initial projections from the Manila-based bank in April and July had set growth at 1.9% and 2.6% respectively for 2026.
The revised forecast reflects South Korea's export growth driven by high global demand for AI chips. The country's expansionary fiscal policy and strong corporate earnings are leading to a gradual recovery in private consumption.
However, the ADB cautioned that potential risks exist, including rising geopolitical tensions, increased volatility in global financial markets, and potential additional US tariff hikes, which could negatively affect exports and investment.
Regarding inflation, the ADB maintained its July forecast, anticipating consumer prices to rise 2.7% on-year in 2026 and 2.2% on-year in 2027. It noted that government efforts to control consumer price increases are expected to partly mitigate inflationary pressures from higher global energy prices and stronger domestic demand.
In July, the Ministry of Finance and Economy adjusted the country's economic growth projection for 2026 to 3%, bolstered by the semiconductor supercycle. The Korea Development Institute also revised its forecast in August, predicting a 3.2% growth for South Korea in 2026, up from an earlier estimate of 2.5%.