South Korea’s central bank, the Bank of Korea (BOK), has revised its economic growth forecast upward to 2 percent for this year, driven by robust export performance and a rebounding private consumption sector.
This adjustment marks a 0.2 percentage-point increase from the BOK’s prior estimate of 1.8 percent growth, announced in November.
The updated projection matches the South Korean government’s own growth forecast and is slightly more optimistic compared to the International Monetary Fund’s (IMF) and the Korea Development Institute’s (KDI) projections of 1.9 percent.
The Organization for Economic Cooperation and Development (OECD) anticipates a 2.2 percent expansion, while a consensus forecast from eight leading global investment banks, including Citi, UBS, and Nomura, points to an average growth rate of 2.1 percent for the year.
Consistent with the positive economic outlook, the BOK maintained its key interest rate steady at 2.5 percent, prioritizing financial stability amidst ongoing housing market fluctuations and a softening local currency (Korean Won).
Looking ahead to 2027, the central bank has lowered its growth prediction to 1.8 percent, down from the previous 1.9 percent. This revision reflects a base effect stemming from the increased growth estimation for the current year.
