South Korea GDP growth forecasts raised by AMRO

The ASEAN+3 Macroeconomic Research Office (AMRO) has raised its economic growth forecast for South Korea, increasing the 2026 projection to 3.3% from 3.1% and the 2027 forecast to 2.7% from 2.2%. This upward revision follows similar positive adjustments from the OECD and the Asian Development Bank (ADB), which cite strong exports and investment demand related to artificial intelligence.

Despite the improved outlook, AMRO warned of potential downside risks, including a slowdown in AI-related demand, Middle East conflicts impacting energy and transport costs, and long-term structural challenges such as an aging population. Inflation for 2026 is expected to rise to 2.7%, while the 2027 forecast has been lowered to 2.3%.

Separately, the International Monetary Fund (IMF) has assessed that South Korea’s current account surplus exceeds appropriate levels relative to its GDP. The Bank of Korea noted that the IMF’s evaluation model may not fully account for South Korea’s specific circumstances, such as rapid population aging and the semiconductor boom, which could lead to an undervaluation of the appropriate current account level.