The International Monetary Fund (IMF) has revised up its 2024 growth outlook for South Korea to 2.5 percent, citing stable global economic expansion. The latest projection represents a 0.2 percentage-point increase from the IMF’s April forecast, which had maintained the outlook at 2.3 percent.
Aligned with other forecasts
The IMF’s latest projection aligns with the forecasts made by the Bank of Korea and the Organisation for Economic Cooperation and Development, which projected a 2.6 percent expansion for the Korean economy in 2024. However, the IMF has slightly reduced its growth forecast for 2025, slashing it by 0.1 percentage point to 2.2 percent.
What are the driving factors?Â
The improved economic outlook for South Korea is driven by a recovery in exports, particularly in the semiconductor industry. In June 2024, South Korean exports rose 5.1 percent year-on-year to reach $57 billion, marking the ninth consecutive month of growth. Semiconductor exports, a key component of the country’s exports, surged by 50.9 percent, reaching an all-time monthly high.
Moreover, for the global economy, the IMF has maintained its 2024 growth forecast at 3.2 percent and revised up its 2025 forecast by 0.1 percentage point to 3.3 percent.
Largest current account surplus in 32 months
Additionally, South Korea has recorded the largest current account surplus in 32 months as of May 2024. The country’s current account surplus reached $8.92 billion in May, a significant turnaround from the $290 million deficit recorded in April. This surplus marks the largest since September 2021, when it reached $9.51 billion.
In the first five months of 2024, South Korea’s current account surplus has reached $25.47 billion, a substantial improvement from the $5.03 billion deficit recorded during the same period in 2023.
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