IMF LOWERS GROWTH OUTLOOK FOR S. KOREA

[Anchor Lead]

The International Monetary Fund (IMF) has revised its economic growth outlook for South Korea this year. The outlook is revised downward from its previous October forecast. The IMF has slashed projections for other major economies as well including the US and China amid the fast spread of the omicron variant.

[Pkg]

The IMF predicts the South Korean economy will grow 3% this year. It’s 0.3 percentage points lower than its October outlook. The global economy is expected to grow 4.4% this year, down half a percentage point from the previous forecast. The growth outlook for most major economies are also lowered. For the US, Eurozone and China, figures are down by 1.2, 0.4 and 0.8 percentage points respectively. The IMF believes global economic growth will slow this year due to omicron and higher than expected inflation. The latest projection is based on the assumption that the spread of omicron will ease after peaking in the first quarter while inflation levels will also gradually fall. The latest outlook also presumes the US central bank will carry out three rate hikes this and next year each and global supply chain issues will also improve. Regarding policy measures for individual governments, the IMF said it’s necessary to reduce fiscal deficit but advised support measures for businesses and vulnerable citizens to be stepped up again if the pandemic experiences a resurgence. It also urged governments to adjust monetary policies in accordance with inflation and job market recovery, and called for vaccine supply to low-income countries through global coordination. For next year, the IMF forecasts the South Korean economy will grow 2.9% and the global economy 3.8%.