AMRO "Korea's Economic Growth Forecast at 2.3% This Year"

2024 Regional Economic Outlook Report

The ASEAN+3 Macroeconomic Research Office (AMRO) projected an economic growth rate of 4.5% this year for South Korea, China, Japan, and the 10 ASEAN countries. South Korea's growth forecast was lower at 2.3%.

The Ministry of Economy and Finance announced on the 8th that AMRO released the "2024 Regional Economic Outlook Report" containing these details. The Regional Economic Outlook Report, published annually by AMRO, reviews the overall economic trends of South Korea, China, Japan, and the 10 ASEAN countries and provides policy recommendations.

AMRO forecasted that the ASEAN+3 region will grow by 4.5% due to robust domestic demand, investment, exports, and recovery in the tourism industry. For South Korea, a 2.3% growth is expected, driven by increased exports following the semiconductor market recovery.

Due to stabilization in international commodity prices, inflation is expected to ease in most ASEAN+3 countries. Inflation in the ASEAN+3 region is projected to moderate to 4.3% this year compared to the previous year. South Korea's inflation rate was forecasted to be lower at 2.5%.

[Image source=Yonhap News]

AMRO mentioned that uncertainty in the regional economy remains high, citing short-term downside risks such as geopolitical tensions, rising commodity prices due to climate change, and delayed economic recovery in China. In the long term, it identified ongoing geopolitical tensions, population aging, and climate change as risk factors for the regional economy.

AMRO noted that most countries in the region are pursuing either tight or neutral fiscal policies and emphasized that efforts to maintain fiscal soundness should continue to secure fiscal capacity for the future.

Regarding monetary policy, AMRO recommended maintaining the current tight monetary stance as core inflation remains high, while responding flexibly on a country-by-country basis depending on future price levels. Additionally, although the relaxed credit supply during the COVID-19 pandemic is being reduced, selective support for vulnerable sectors such as small and medium-sized enterprises remains necessary.

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