An international organization predicted that Korea's economic growth rate will reach 2% next year. That is about twice this year's growth rate. It pointed to overseas investments by domestic investors as a factor behind the recent sharp rise in the won-dollar exchange rate.
The Ministry of Economy and Finance said on the 19th that the ASEAN+3 (Korea, China, and Japan) Macroeconomic Research Office (AMRO, hereafter AMRO) released a "2025 Korea annual consultation report" containing these details. AMRO visits member countries every year to prepare and release an annual consultation report. This report was prepared based on meetings AMRO's annual consultation mission held with the Ministry of Economy and Finance (MOEF), the Bank of Korea, and others during its visit to Korea from the 8th to the 19th of this month.
AMRO forecast Korea's gross domestic product (GDP) growth for next year at 1.9%. That is 0.9 percentage points higher than the 2025 growth outlook (1.0%) projected based on data from the first through third quarters of this year. AMRO Chief Economist Dong He said, "The Korean economy has maintained a steady recovery since the June presidential election," adding, "We see a high likelihood that this momentum will strengthen further in 2026."
AMRO projected Korea's inflation rate for next year at 1.9%. That is 0.2 percentage points lower than the 2025 inflation outlook (2.1%) based on data from the first through third quarters of this year. On this, AMRO noted that supported by stabilizing food prices and a slowdown in global energy expense, inflation is being maintained near the Bank of Korea's 2% target.
Regarding the recent approach of the won-dollar exchange rate to 1,500 won, Chief Economist Dong He said, "A portfolio rebalancing by investors residing domestically played a role," adding, "Interest in overseas stock markets such as the United States has increased, and investments have expanded." AMRO judged that although the won-dollar exchange rate has risen, Korea's external sector remains solid. AMRO said, "Foreign exchange reserves amount to 2.6 times short-term external debt (maturing in less than one year)," adding, "This provides a significant buffer against potential shocks."
On Seoul dwelling prices, AMRO said, "Market stabilization may take some time." AMRO added, "With production growth weak and inflationary pressures contained, the continued rise in Seoul dwelling prices and the exchange rate situation should be closely monitored."