The Organisation for Economic Co-operation and Development (OECD) on the 23rd (local time) projected Korea's economic growth this year at 1%. This maintains the outlook presented in Jun., and is somewhat higher than the forecasts of the International Monetary Fund (IMF), the Bank of Korea, and the Korea Development Institute (KDI).
The OECD expected Korea's growth rate for this year to be 2% last year, but it kept lowering it to 1.5% in Mar. this year and 1% in Jun. At the time, among major countries, Korea recorded the second-largest drop after the United States (2.2%→1.6%).
In this month's release, the OECD kept its Jun. outlook. It set Korea's economic growth rate at 1% for this year and 2.2% for next year.
The OECD said that while major countries' economic growth rates are expected to slow next year compared with this year, Korea's recovery will continue. It projected Korea's inflation rate at 2.2% this year and 1.9% next year.
The global economic growth rate is expected to be 3.2% this year, up 0.3 percentage points from the Jun. outlook. The forecast for next year is 2.9%, the same as before.
The OECD analyzed that in the second half of this year, the early shipping effect will diminish, and tariff increases and high policy uncertainty will dampen investment and trade, slowing growth.
By country, in the case of the United States, it expected growth to slow due to additional tariff increases and persistent policy uncertainty. The growth rate is projected at 1.8% this year and 1.5% next year.
For the eurozone, it expected that looser credit conditions would partially offset rising trade frictions and geopolitical uncertainty. The eurozone's economic growth rate is expected to be 1.2% this year and 1.0% next year.
Japan is projected to grow 1.1% this year and 0.5% next year, as solid corporate profits and increased investment positively affect economic activity.
China's growth rate is expected to slow starting in the second half of this year due to a decrease in the early shipping effect, high tariff levies on imports, and reduced fiscal spending. Accordingly, it is projected to grow 4.9% this year and 4.4% next year.
It saw inflation being affected by slower economic growth and labor markets. The G20 inflation rate is expected to be 3.4% this year and 2.9% next year.
The OECD especially viewed that U.S. tariff increases will be reflected in final goods prices and further fuel inflationary pressure in the United States. The United States' annual inflation next year is projected to exceed the target.