This year’s economic growth forecasts for major countries have been raised, but those of Korea have been revised down 0.2% from last November’s forecast.
According to the Organization for Economic Co-operation and Development’s (OECD) “Interim Economic Outlook” published on Friday the 17th (local time), Korea’s growth rates in 2023 and 2024 are forecast to be 1.6% and 2.3%, respectively that order. . In the case of this year’s growth rate, this forecast was reduced by △0.2%p compared to the forecast for November 2022, and the growth rate forecast for next year was raised by +0.4%p.
The OECD predicted that Korea, along with Australia, would benefit from the rebound in China’s growth, and that the impact of tight financial conditions would be offset.
“Korea and Australia will benefit from the expected growth rebound in China, offsetting the impact of tighter financial conditions.”
The OECD predicted that Korea’s inflation rate would be 3.6% in 2023 and 2.4% in 2024. This year’s inflation rate was reduced by △0.3%p compared to the forecast for November 2022, but next year’s inflation rate was raised by +0.1%p.
|
Prospects of the Principal Domestic Institutions |
government(‘22.12) |
Bank of Korea(‘23.2) |
KDI(‘23.2) |
OECD(‘23.3) |
|
’23annual growth rate(%): |
1.6 |
1.6 |
1.8 |
1.6 |
|
’23annual inflation rate(%): |
3.5 |
3.5 |
3.5 |
3.6 |
Meanwhile, the OECD predicted that the global economy would gradually improve with improved business and consumer sentiment, a drop in energy and food prices, and the full reopening of China, while inflation would gradually slow.
As a result, the global economic growth rate was raised to 2.6% in 2023 and 2.9% in 2024, +0.4% and +0.2%p, respectively, compared to the November 2022 forecast. Inflation is expected to fall further from 8.1 % last year to 5.9% this year and to 4.5% in 2024.
However, the OECD assessed that the improved outlook for global economic conditions was still on a “fragile” basis, and that upside and downside risks had recently balanced out, but that downside risks remained be a bit dominant.
Geopolitical uncertainty such as the Russo-US war, weakening food security in emerging countries, and deepening supply chain fragmentation are very likely to act as aggravating factors for growth and prices. I saw that uncertainty remained.
In addition, downside risks include an increased burden on households and businesses due to rapid increases in interest rates, instability of financial institutions (bankruptcy of SVB, etc.) and a sharp decline in house prices, risks of debt expansion and fiscal deficits in countries that are n emerging due to global progress. interest rates, and risks of energy supply shortages in Europe.
