By Kang Yoon-seung
The Organization for Economic Cooperation and Development (OECD) has kept its projection for South Korea’s economic growth in 2023 at 1.5 percent, along with its inflation forecast of 3.4 percent, on Tuesday.
The figure is just above the 1.4-percent growth outlook projected by the South Korean government in July.
In June, the Paris-based organization had revised the growth outlook downwards by 0.1 percentage point due to sluggish exports and private investment.
The OECD also estimated the global economy to expand 3 percent in 2023, up 0.3 percentage point from the previous outlook, owing to the positive performance of the United States, Japan, and Brazil.
However, the organization lowered its forecast for 2024 from 2.9 percent to 2.7 percent, citing the impact of monetary tightening measures and the weakening of China’s recovery.
The OECD noted that major countries are likely to maintain their monetary tightening moves for the time being due to persisting inflationary pressures.
South Korea’s central bank has kept its key interest rate at 3.5 percent since April 2022, after seven consecutive rate hikes from April 2022 to January 2023.
The OECD suggested that countries should make efforts to “rebuild fiscal space” to “meet future policy priorities and respond effectively to future shocks,” adding that this would also “improve the near-term alignment of fiscal and monetary policies, reducing the burden on monetary policy to lower demand pressures and inflation.”
colin@yna.co.kr
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