IMF announces January economic outlook report
This year’s growth forecast for Korea has been revised downward from 2.2% to 2.0%.
Global growth forecast rises from 3.2 to 3.3%
US growth forecast significantly raised… 2.2→2.7%
(Sejong = Newsis) Reporter Ho-gyun Ahn = The International Monetary Fund (IMF) predicted that the Korean economy will record an economic growth rate of around 2% for two consecutive years. Amid internal and external uncertainties, this year’s growth forecast was revised downward from 2.2% to 2.0%, and the 2026 forecast was revised downward from 2.2% to 2.1%.
The global economic growth rate forecast was revised upward (from 3.2 to 3.3%), predicting that the U.S. growth rate will increase significantly this year, but the negative view on the Korean economy was further strengthened.
The IMF predicted Korea’s economic growth rate this year to be 2.0% through the January World Economic Outlook report released on the 16th. This figure is 0.2 percentage points (p) lower than the report in October last year (2.2%). This is similar to the forecasts of the Ministry of Strategy and Finance (1.8%), the Bank of Korea (1.9%), the Korea Development Institute (2.0%), and the Organization for Economic Co-operation and Development (2.1%).
This year’s global economic growth rate was presented at 3.3%, up 0.1 percentage points from the report in October last year. The growth forecast for the United States, ahead of the launch of a new administration, has been raised significantly from 2.2% to 2.7%.
The US growth rate is expected to be revised upward significantly due to strong consumption due to ‘wealth effects’, relaxed monetary policy, and stable financial conditions.
On the other hand, the Eurozone lowered it from 1.2% to 1.0%. Many developed countries were expected to perform poorly due to continued geopolitical tensions and a weak manufacturing sector. Growth forecasts for Germany (0.8 → 0.3%), France (1.1 → 0.8%), and Italy (0.8 → 0.7%) were revised downward.
Among developed countries excluding European countries, the growth rate forecasts for Korea and Canada (2.4% → 2.0%) were lowered.
This year’s economic growth rate in emerging developing countries remained at 4.2%, the same as the forecast in October last year.
(Palm Beach = AP/Newsis) U.S. President-elect Donald Trump is holding a press conference at his Mar-a-Lago home in Palm Beach, Florida on the 7th (local time). 2025.01.08.
China’s growth forecast was slightly raised from 4.5% to 4.6%. It is predicted that large-scale stimulus policies will compensate for the negative effects of increased trade uncertainty and sluggish asset markets.
Russia revised it upward from 1.3% to 1.4%, and India (6.5%) and Brazil (2.2%) presented the same figures as the report from October last year. Saudi Arabia fell significantly from 4.6% to 3.3%.
The IMF predicted that the U.S. economy would perform well following the inauguration of the Trump administration, but predicted that downward pressure on the global economy may increase.
In particular, the new US government’s expansion of protectionism, expansionary fiscal policy, and immigration policy were presented as risk factors. He urged caution, saying that expansionary fiscal policies and deregulation policies could have a positive impact on U.S. economic growth in the short term, but could pose a threat to the global economy in the mid- to long-term by causing a rise in global bond yields and capital flight from emerging countries.
They were also concerned that the new U.S. government’s expansion of protectionism and immigration restriction policies could have a negative impact on both the U.S. and global economies by intensifying trade conflicts and disrupting labor supply.
The IMF recommended that monetary policy be adjusted by comprehensively considering prices, growth, and employment situations to suit each country’s circumstances. In addition to fiscal soundness efforts for sustainable debt management, growth-friendly financial investment and protection of the vulnerable were also emphasized.
In addition, in preparation for increased capital movement volatility, it was proposed to temporarily intervene in the foreign exchange market, introduce appropriate macroprudential measures, and utilize capital flow restrictions in the event of a sudden crisis. In addition to structural reforms to increase productivity, efforts to strengthen multilateral trade cooperation were also called for.
Meanwhile, the IMF lowered Korea’s growth forecast for 2026 from 2.2% to 2.1%. The global growth rate was forecast at 3.3%, the same as last time, and the US growth rate was forecast at 2.1%, up 0.1 percentage points. Over the next year, developed countries are expected to grow by 1.8% and emerging countries are expected to grow by 4.3%.
(Incheon = Newsis) Reporter Jinhwan Jeon = Containers are piled up at the Incheon New Port Container Terminal in Yeonsu-gu, Incheon. 2025.01.15. (email protected)
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Source: www.newsis.com
