ADB Upgrades South Korea's 2026 Growth Outlook to 2.6%

The Asian Development Bank (ADB) has raised its forecast for South Korea's economic growth rate next year to 2.6%. This upward revision reflects factors including stronger-than-expected growth momentum in the first quarter. In its Asian Development Outlook (ADO) Supplement, the ADB projected South Korea's 2026 economic growth rate at 2.6%, up 0.7 percentage points from the 1.9% forecast in April. This figure aligns with the projection presented by the International Monetary Fund (IMF) in its World Economic Outlook in July.

The ADB analyzed that consumption trends will also continue to show stability. The rally in the stock market, improved performance of information technology (IT) firms, and government support policies were cited as factors underpinning the recovery in domestic demand.

Inflation forecasts were also raised together due to the impact of rising international energy prices. The ADB projected South Korea's 2026 consumer price inflation rate at 2.7%, 0.4 percentage points higher than its April forecast.

Growth forecasts for other developed Asia-Pacific nations, including Taiwan, Hong Kong, and Singapore, were also revised upward across the board, driven by the favorable semiconductor cycle. Taiwan jumped 1.9 percentage points to 9.5%, Singapore rose 1.2 percentage points to 3.2%, and Hong Kong increased by 0.4 percentage points to 3.0%. In contrast, Japan remained at 0.7% and Australia at 2.0%, maintaining or slightly lowering existing forecasts.

Meanwhile, the ADB set its forecast for South Korea's economic growth rate in 2027 at 2.0%, up 0.1 percentage points from the previous estimate, and also raised its inflation outlook by 0.2 percentage points to 2.2%.