ADB Maintains South Korea's Growth Forecast at 0.8% for This Year

September Asian Economic Outlook Update Released
Asia-Pacific Growth Rate Revised Up to 4.8%, Up 0.1 Percentage Points from Previous Forecast

The Asian Development Bank (ADB) has maintained its forecast for South Korea's economic growth rate this year at 0.8%, the same as two months ago. Meanwhile, the growth outlook for the Asia-Pacific region has been revised upward by 0.1 percentage points to 4.8%.

According to the Ministry of Economy and Finance, the ADB released its "September 2025 Asian Economic Outlook Update" on the morning of September 30. The ADB issues an annual forecast in April each year, followed by a supplementary outlook in July and an updated outlook in September based on the April projections.

In this latest outlook, South Korea's economic growth rate for this year remains at 0.8%, unchanged from the July forecast. This figure is lower than the projections of the South Korean government and the Bank of Korea (0.9%) and the Organisation for Economic Co-operation and Development (OECD, 1.0%), but matches the International Monetary Fund (IMF) forecast of 0.8%. The July outlook had already been revised downward by 0.7 percentage points from April, reflecting a decline in construction investment, slowing exports, and weakness in the real estate market.

The ADB stated, "We have maintained the July forecast due to continued sluggishness in the construction sector, rising U.S. tariffs, and related uncertainties. However, the government's expansionary fiscal policy and eased monetary policy are expected to support a recovery in domestic demand in the second half of the year."

The economic growth rate forecast for South Korea next year also remains unchanged from July at 1.6%. The inflation rate is also projected to remain at 1.9% for both this year and next year, in line with the previous forecast.

The ADB has raised its economic growth forecast for the Asia-Pacific region this year by 0.1 percentage points to 4.8%. Although increased U.S. tariffs and trade uncertainties are exerting significant downward pressure, the implementation of accommodative fiscal and monetary policies by various governments is expected to partially offset these effects.

The upward revisions in growth forecasts this year were particularly notable in Taiwan (5.1%, +1.6 percentage points), Singapore (2.5%, +0.9 percentage points), Vietnam (6.7%, +0.4 percentage points), and Thailand (2.5%, +0.2 percentage points).

However, the growth outlook for next year has been revised downward by 0.1 percentage points to 4.5%, taking into account the impact of export contraction due to higher tariffs. In addition to trade uncertainties, the ADB identified geopolitical tensions and concerns over a downturn in China's real estate market as major downside risks.

As for inflation in the Asia-Pacific region, the ADB expects price stability due to falling international oil and food prices, projecting an inflation rate of 1.7%, down 0.3 percentage points from the July forecast. The outlook for next year remains unchanged at 2.1%.

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