Moody's Raises South Korea's Economic Growth Forecast for This Year from 3.5% to 4.0%

[Asia Economy Reporter Minji Lee] The international credit rating agency Moody's announced on the 31st that it has raised South Korea's economic growth forecast for this year from 3.5% to 4.0%.

In its World Economic Outlook report published on the same day, Moody's revised South Korea's real Gross Domestic Product (GDP) growth forecast to 4.0%, reflecting improved economic conditions. This is an increase of 0.5 percentage points from the 3.5% forecast made in May.

Moody's explained, "A significant part of South Korea's economic recovery so far has been driven by exports," adding, "There is strong global demand for manufactured goods, especially electronic products, benefiting South Korea." It further noted, "Supply chain bottlenecks in the manufacturing sector caused the growth rate to slow to 0.7% in the second quarter from 1.7% in the first quarter, but seasonally adjusted total production has already surpassed the pre-COVID-19 peak."

Moody's also raised the economic growth forecast for South Korea next year from 3.0% to 3.2%. It stated, "We expect the recovery of the South Korean economy to strengthen," but added, "This is entirely dependent on the vaccination schedule."

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