An International Monetary Fund (IMF) team declared Wednesday that South Korea’s inflation rate is anticipated to “moderate” to the government’s goal of 2 percent by the end of 2024. In August, consumer prices rose at a faster-than-expected rate of 3.4 percent due to higher prices of agricultural and manufactured goods. Harald Finger, Korea missions chief at the Washington-based organization, stated that “despite a temporary rebound in August, inflation is projected to continue moderating and approach the authorities’ 2 percent target by end-2024.” He also mentioned that the economic outlook is subject to a high degree of uncertainty due to the current, uncertain global economic environment.
The IMF team visited South Korea to hold meetings with government officials and suggested that the country should maintain its “restrictive stance of monetary and fiscal policy” in the near future. Finger advised South Korea to seek structural reforms to address emerging challenges, including the population crisis, and stated that financial market stabilization measures should be “temporary and targeted.”
Finger maintained the IMF’s 1.4 percent on-year growth projection for the South Korean economy, saying that “growth is likely to improve in the second half of the year as the semiconductor sector gradually recovers, reaching 1.4 percent for the year and strengthening further over the medium term.”