Asian Development Bank raises Korea's growth projection for 2026

The Asian Development Bank (ADB) on Thursday revised up its economic growth projection for Korea to 2.6 percent from its April report, citing robust AI-related demand around the globe.

The ADB's latest estimate marks a 0.7 percentage point increase, with the bank also raising its 2027 growth outlook for Asia's fourth-largest economy by 0.1 percentage point to 2 percent.

In detail, the ADB said Korea's export growth, led by global AI demand, is expected to serve as a key growth driver through 2027.

The semiconductor industry is also expected to offset downward pressures stemming from global energy price volatility and supply chain disruptions, it added.

Korea's private consumption was expected to maintain a stable trend on the back of a strong stock market, robust earnings at tech firms and the government's support measures.

Potential hurdles for Korea, meanwhile, include long-term energy supply volatility, Washington's tariff policies and a correction in the stock market, the ADB said.

Touching on inflation, the ADB projected consumer prices to rise 2.7 percent and 2.2 percent in 2026 and 2027, respectively, up 0.4 percentage point and 0.2 percentage points from the previous report, citing higher global energy prices.

Last month, the Organisation for Economic Cooperation and Development raised its outlook for Korea's economic growth in 2026 to 2.6 percent from 1.7 percent three months earlier, also citing the AI boom.

The International Monetary Fund revised up its growth forecast for Korea in 2026 to 2.6 percent this week, also up 0.7 percentage points from the previous report.

Yonhap