By Kang Yoon-seung
SEOUL, Sept. 20 (Yonhap) — The Asian Development Bank (ADB) has declared that the South Korean economy will remain at a 1.3 percent growth rate in 2023, despite the slight decrease in July. The organization suggested that the country might experience weaker-than-expected inflation. Additionally, it estimated that the growth rate for 2024 will remain at 2.2 percent.
The ADB’s projection is lower than the 1.4 percent growth forecast made by the South Korean government in July, and the 1.5 percent growth rate expected by the Organization for Economic Cooperation and Development (OECD) the previous day.
The bank believes that the South Korean economy will rebound in exports, however, high borrowing costs are expected to affect domestic consumption and investment. The central bank has kept its key interest rate at 3.5 percent since April 2022 and has not changed it since January 2023. The ADB also estimated that the inflation rate in 2023 will be 3.3 percent, 0.2 percent lower than the previous report.
Consumer prices rose 3.4 percent on-year in August due to higher prices of agricultural goods, and the government has attributed this increase to temporal factors. Inflation is anticipated to start slowing down in the following month.
The ADB has also identified potential risks for the region in the future, such as monetary tightening measures, the slowdown in China’s property market, and growing concerns about food security in Asia due to climate change.
colin@yna.co.kr
(END)