Containers are stacked up for outbound shipments at Gamman Pier in Busan.
Manila: The Asian Development Bank (ADB) yesterday slashed its 2022 growth outlook for the South Korean economy to 2.6% amid the ongoing Ukraine crisis and aggressive monetary tightening by major countries.
The latest estimate by the Manila-based bank is lower than the 3% growth forecast made in April. The ADB, however, maintained its earlier forecast of the country’s 2.6% growth for next year.
The bank cited the slowdown in the global economic growth and interest rate hikes as reasons for its downward revision despite strong external demand.
In June, the Seoul government also lowered its 2022 economic growth outlook to 2.6% from its earlier forecast of 3.1%. The Bank of Korea also revised down its growth projection for this year to 2.7% from a 3% rise projected three months earlier.
As for inflation, the ADB sharply raised its 2022 outlook for South Korea to 4.5% from its April forecast of 3.2%. It also raised the country’s inflation growth outlook for next year to 3%, up 1 percentage point from its previous forecast.
South Korea’s consumer prices jumped 6% in June from a year earlier, the fastest rise in about 24 years and accelerating from a 5.4% spike the previous month.
Meanwhile, the ADB lowered its 2022 average growth outlook for 46 developing Asian countries to 4.6% from 5.2%. It forecast those countries to grow 5.25 in 2023.