AMRO revises up S. Korean economy's growth projection this year to 3.3 pct

The ASEAN+3 Macroeconomic Research Office (AMRO) has revised its growth projection for South Korea's economy upward to 3.3 percent for this year. This adjustment comes from the organization's quarterly update report, although the specific factors leading to the revision were not disclosed in the source material. For 2027, AMRO anticipates the South Korean economy to grow at a rate of 2.7 percent, up from its previous forecast of 2.2 percent.

In terms of inflation, AMRO projects consumer prices to increase by 2.7 percent on-year in 2026, a slight revision from its earlier prediction of 2.6 percent, with a downward revision for 2027 from 2.4 percent to 2.3 percent. In a recent report, the OECD raised its 2026 economic growth forecast for South Korea to 3.7 percent, citing robust exports and rising production as key drivers.

This represents an increase of 1.1 percentage points from the previous forecast of 2.6 percent in June. The OECD attributes South Korea's growth to strong exports and a gradual recovery in consumption for the subsequent year. In September, the Asian Development Bank (ADB) also raised its 2026 growth forecast for South Korea to 3.2 percent, citing strong exports and corporate earnings, particularly in the wake of the AI boom.

AMRO, on the other hand, noted that a slowdown in AI-related demand could potentially impact exports and investment activities in the region. The report also highlighted potential inflationary pressures stemming from rising energy, transportation, and production costs following the Middle East crisis, as well as climate change-induced higher food prices.

Other structural challenges for the Asian region, according to AMRO, include fragmentation and an aging population.