The Asian Development Bank (ADB) kept its forecast for Korea's economic growth this year unchanged at 0.8%. It said weakness in the construction sector and uncertainty related to the United States' tariff hikes are continuing. The forecast for next year was also maintained at 1.6%.
According to the Ministry of Economy and Finance on the 30th, the ADB, in its Asia Economic Outlook 2025 released that day, forecast Korea's gross domestic product (GDP) growth this year at 0.8%. The ADB projected Korea's growth at 1.5% in April, then lowered it to 0.8% in Jul., and this time kept the previous forecast. This matches the projection by the Korea Development Institute (KDI, 0.8%) and is lower than those by the Bank of Korea (0.9%), the International Monetary Fund (IMF, 0.9%), and the Organization for Economic Cooperation and Development (OECD, 1%).
The ADB, when it lowered its growth forecast in April, said it reflected a decline in construction investment, a slowdown in exports, and weakness in the real estate market. In this forecast as well, the ADB said it maintained the Jul. projection as weakness in the construction sector and the United States' tariff hikes and related uncertainty continue. However, it assessed that the government's expansionary fiscal policy and an accommodative monetary policy will contribute to a recovery in domestic demand in the second half.
The ADB also projected Korea's economic growth next year at 1.6%, the same as before. This matches the forecasts by the Bank of Korea (1.6%) and KDI (1.6%) and is lower than those by the OECD (2.2%) and the IMF (1.8%). The inflation outlook for both this year and next remains at 1.9%, maintaining the Jul. projection.
In this outlook, the overall growth forecast for the Asia-Pacific region rose to 4.8% from 4.7%. While the United States' tariff hikes and trade uncertainty are exerting significant downward pressure, countries' accommodative fiscal and monetary policies are expected to partially offset it. In contrast, next year's regional growth was revised down to 4.5% from 4.6%. The ADB said it took into account the export contraction effect from tariff hikes.
By major country, China's growth forecast for this year was kept at 4.7%, while Taiwan was sharply revised up to 5.7% from 3.5%. India was kept at 6.5%, and Southeast Asia rose to 4.3% from 4.2%. Vietnam (6.3%→6.7%) and Singapore (1.6%→2.5%) led the growth trend.