May 27, 2022

South Korea’s Teflon economy finally hit by global headwinds


SEOUL – The International Monetary Fund (IMF) this week cut its gross domestic product (GDP) growth forecast for South Korea to 2.5%, down significantly from its March projection of 3%, in a telling reflection of a decelerating global economy.

The IMF’s projection is well south of that of the Bank of Korea, which anticipates a much more bullish 3.7%. The latest IMF estimate is also below those of credit-rating agencies Fitch and Moody’s, which both stand at 2.7%.

“Global growth is expected to slow significantly in 2022, largely as a consequence of the war in Ukraine,” the IMF wrote in its April World Economic Outlook publication. “The economic costs of war [in Ukraine] are expected to spread farther afield through commodity markets, trade, and—to a lesser extent—financial interlinkages.”