The Asian Development Bank (ADB) said on the 9th that it is revising up its forecast for Korea's consumer price inflation this year to 2.7% from 2.3%. That matches the Bank of Korea (BOK) and the Korea Development Institute (KDI) and is higher than the Organization for Economic Cooperation and Development (OECD, 2.6%) and the International Monetary Fund (IMF, 2.5%).
ADB released its Asian economic outlook that day. ADB presents economic outlooks for major Asian countries every April and issues supplementary and revised outlooks in July, September and December. ADB raised this year's consumer price inflation forecast by 0.4 percentage points from April, saying "the rise in international energy prices will be reflected in consumer prices." It also raised next year's consumer price inflation forecast to 2.2% from 2.0%.
ADB also revised up its forecast for Korea's growth this year to 2.6% from 1.9%. That is an increase of 0.7 percentage points in three months. ADB said "first-quarter economic growth was stronger than expected." According to the Bank of Korea (BOK), real gross domestic product (GDP) in the first quarter grew 1.8% from the previous quarter. The growth rate was the highest in 5 years and 6 months since the third quarter of 2020 (2.3%). That was because exports, including semiconductors, performed well. First-quarter exports rose 5.9%. The growth rate was the highest since the third quarter of 2020 (14.9%).
ADB also raised next year's growth forecast to 2.0% from 1.9%. ADB said "export expansion driven by rising global demand for artificial intelligence (AI) will be a key driver of Korea's economic growth this year and next year." However, as potential risks to Korea's economy, it cited ▲ prolonged disruptions in energy supply ▲ reimposition of U.S. tariff ▲ entry into a stock correction.
Meanwhile, ADB also revised up Taiwan's growth forecast for this year, which like Korea is benefiting from a semiconductor boom, to 9.5% from 7.6%. Japan was kept at 0.7%.