OECD Lowers Growth Forecast for South Korea amid Global Economic Volatility
The Organization for Economic Cooperation and Development (OECD) on Friday lowered its 2023 growth forecast for South Korea to 1.6 percent from 1.8 percent in its previous outlook given in November. This downward revision is in line with the Bank of Korea's assessment released earlier in February, when the central bank lowered its growth outlook from the previously predicted 1.7 percent.[0]
The OECD also decreased its inflation outlook for Korea to 3.6 percent from 3.9 percent, in line with global inflation that it projected would take a downward trajectory in most G20 countries. Despite the lowered outlook, the organization nevertheless pointed out the global economy still faces more downward risks, as it is standing on a “fragile” foundation amid uncertainties, including the war and fragmentation of supply chains, as well as global monetary tightening moves.[1]
The OECD also warned that the UK will be the only economy in the G20 apart from Russia to shrink this year, as high inflation, the energy crisis and low productivity hinder its recovery.[2] However, the organization still expressed optimism for the global economy, saying it will gradually recover through 2024 following improved consumer sentiment, falling energy and food prices, along with the full-fledged reopening of the Chinese economy.[3]
Korea, along with Australia, will benefit from the expected growth rebound in China, offsetting the impact of tighter financial conditions, the OECD added.[3] With these in mind, the OECD's latest outlook reflects the global economic volatility posed by the COVID-19 pandemic and the need for countries to remain resilient in the face of increasing economic uncertainty.
0. “OECD slashes S. Korea's 2023 growth outlook to 1.6 pct” Yonhap News Agency, 17 Mar. 2023, https://en.yna.co.kr/view/AEN20230317006300320
1. “Asia's economic outlook ‘relatively strong' despite subdued global growth: OECD chief” CNA, 17 Mar. 2023, https://www.channelnewsasia.com/asia/oecd-secretary-general-mathias-cormann-economic-outlook-svb-inflation-growth-3353791
2. “OECD says UK faces being only member of G7 in recession this year” Daily Mail, 17 Mar. 2023, https://www.dailymail.co.uk/news/article-11871867/OECD-says-UK-faces-member-G7-recession-year.html
3. “OECD lowers 2023 growth outlook for Korea to 1.6%” 코리아타임스, 17 Mar. 2023, https://www.koreatimes.co.kr/www/biz/2023/03/488_347319.html
