Seoul, September 23 (QNA) - The Asian Development Bank (ADB) on Wednesday raised its 2026 economic growth forecast for South Korea to 3.2% from the 2.6% projected in July, citing strong exports and corporate earnings amid the AI boom.
According to Yonhap News Agency, the ADB's latest estimate marks a 0.6% increase from the previous report, with the bank also raising its 2027 growth outlook for Asia's fourth-largest economy by 0.3% to 2.3%.
The Manila-based bank had projected growth of 1.9% and 2.6% for 2026 in its April and July reports, respectively, for Asia's No. 4 economy.
The ADB said the revised forecast reflected South Korea's growing exports amid soaring global demand for AI chips. South Korea's expansionary fiscal policy and robust corporate earnings are contributing to a gradual recovery in private consumption, it added.
The ADB, however, noted potential risks include rising geopolitical tensions, increased volatility in global financial markets and additional US tariff hikes, which could weigh on exports and investment.
As for inflation, the ADB maintained its July forecast, predicting consumer prices will likely rise 2.7% on-year in 2026 and 2.2% on-year in 2027. The ADB said the government's efforts to curb consumer price increases were expected to partially offset inflationary pressures from higher global energy prices and stronger domestic demand.
In July, the Ministry of Finance and Economy revised up the country's economic growth projection for 2026 to 3%, supported by the semiconductor supercycle.
In August, the Korea Development Institute (KDI) also said South Korea's economy is expected to grow 3.2% in 2026, revising up its previous forecast of 2.5%. (QNA)