ADB Raises South Korea's Growth Rate from 3.3% to 3.5%... Forecasts 3.1% for Next Year

ADB Announces 2021 Asia Regional Economic Outlook (ADO)
Most Countries' Growth Forecasts Revised Upward... China Expected to Grow 8.1% This Year

[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Kim Hyunjung] The Asian Development Bank (ADB) has revised South Korea's economic growth rate for this year upward by 0.2 percentage points from the end of last year, forecasting it at 3.5%.

On the morning of the 28th, ADB released the '2021 Asian Development Outlook (ADO)', predicting that South Korea's gross domestic product (GDP) growth rate will achieve -1.0% last year, 3.5% this year, and 3.1% next year. This year's growth forecast is 0.2 percentage points higher than the 3.3% forecast made in December last year.

Regarding the background of South Korea's economic growth recovery, ADB diagnosed that it is "due to expansionary fiscal and monetary policies, increased exports driven by rising demand for semiconductors and IT products, consumption stimulation through automobile tax reductions, and the Korean New Deal initiative."

Furthermore, emphasizing sustainable green and inclusive growth and the large-scale financing required for it, ADB stated that as a measure to recover the economy from COVID-19 in the future, "Governments within Asia should mobilize private funds such as green finance through various policy options including tax incentives and subsidies," while stressing intergovernmental cooperation within the region to establish agreed standards to assess the environmental impact of private funds such as green finance.

In particular, ADB also evaluated the Korean government's Green New Deal policy as a government investment for sustainable economic recovery and a national development strategy that provides a blueprint for the Asian economy.

On the same day, ADB forecasted that the economic growth rate of 46 developing countries in Asia will sharply rise from -0.2% last year to 7.3% this year, and reach 5.3% next year. The regional growth rate was revised upward by 0.5 percentage points compared to the forecast of 6.8% at the end of last year. Central Asian countries, which recorded a growth rate of -1.9% last year, are expected to grow by 3.4% this year and 4.0% next year, while Southeast Asian countries, which experienced a sharp economic decline of -4.0% this year, are expected to rebound with 4.4% growth this year and 5.1% next year.

Most individual countries' growth forecasts were revised upward. China's growth rate for this year, which was 2.3% last year, was raised by 0.4 percentage points from the December forecast of 7.7% to 8.1%, with next year's growth expected at 5.5%. India's growth rate for this year was raised by 3 percentage points from the previous forecast of 8.0% to 11.0%, with 7.0% expected next year. Hong Kong's growth rate for this year was lowered by 0.5 percentage points from 5.1% to 4.6%, with 4.5% growth forecast for next year. Myanmar, which experienced a bloody situation due to a military coup, is expected to see a sharp economic contraction of -9.8% this year.

ADB forecasted the average growth rate of all Asian developing countries at 7.3% this year and 5.3% next year, while Asian developing countries excluding South Korea, Singapore, Taiwan, and Hong Kong?emerging industrial economies (NIEs)?are expected to grow by 7.7% and 5.6% during the same period.

This content was produced with the assistance of AI translation services.