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S. Korean economy to grow 2.3% in 2024: AMRO

By Yonhap

Published : April 8, 2024 - 11:17

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This photo shows a port in South Korea's southeastern city of Busan on April 1, 2024. (Yonhap) This photo shows a port in South Korea's southeastern city of Busan on April 1, 2024. (Yonhap)

An economic surveillance organization in Asia has expected the South Korean economy to expand 2.3 percent this year on rising exports, Seoul's finance ministry said Monday.

The ASEAN+3 Macroeconomic Research Office made the assessment in its regional report, noting that the recovery of the semiconductor sector will boost exports and lead the overall economic growth, according to the Ministry of Economy and Finance.

Last year, the Korean economy expanded 1.4 percent amid a global economic slowdown, but exports, a key growth engine, have been rising after a yearlong downturn since the end of 2023 as the chip sector has made a turnaround.

The country is forecast to log lower growth of 2.1 percent in 2025, AMRO said.

The organization expected South Korea's inflation to reach 2.5 percent this year, compared with 3.6 percent in 2023, before falling to 2 percent in 2025.

Inflation has been moderating, though officials have said that the pace has been slower than earlier expected due to high oil and fresh food prices.

The 10-member Association of Southeast Asian Nations plus South Korea, Japan and China are expected to achieve 4.5 percent economic growth in 2024 and 4.2 percent the following year on the back of the recovery of the tourism sector and rising domestic demand, accelerating from a 4.3 percent expansion in 2023.

The bloc is forecast to see inflation reach 4.3 percent this year and 3.7 percent for 2025, AMRO said.

The organization pointed out that uncertainties remain high in the regional economy, as it is facing such challenges as geopolitical risks, rising prices of raw materials and the slower recovery of the Chinese economy.

It cited the aging population, climate changes and geopolitical issues as longer-term downside risks.

Most countries in the region have taken either a tight or neutral monetary stance, AMRO said, calling for continued effort to ensure financial soundness to curb still-high inflation.

The Singapore-based organization was established in 2011 to promote macroeconomic and financial stability in the Asian region, which involves the 10-member ASEAN and its three Northeast Asian partners of South Korea, China and Japan. (Yonhap)