ADB raises Korea's 2026 growth forecast to 3.2%

The Asian Development Bank (ADB) has revised its economic growth forecast for South Korea, now projecting a 3.2 percent increase for 2026, up from 2.6 percent previously estimated in July. This upward adjustment, a 0.6 percentage point increase, is attributed to strong exports and robust corporate earnings, driven by the artificial intelligence (AI) boom. The bank's revised forecast for 2027, the country's fourth-largest economy in Asia, has also been raised by 0.3 percentage point to 2.3 percent.

Previously, the ADB had forecasted growth of 1.9 percent for 2026 and 2.6 percent for the following year. The Manila-based institution's latest assessment reflects the growing exports fueled by a surge in global demand for AI chips. Additionally, Korea's expansionary fiscal policy and solid corporate earnings are facilitating a gradual recovery in private consumption, the ADB stated.

However, the ADB also highlighted potential risks that could impact Korea's economic growth. These include rising geopolitical tensions, heightened volatility in global financial markets, and possible additional U.S. tariff hikes, which could negatively affect exports and investment. Despite these concerns, the ADB maintains its forecast for inflation.