ADB forecasts 1.9% economic growth for Korea this year

[Financial News] The Asian Development Bank (ADB) on the 10th forecast South Korea’s economic growth this year at 1.9%, 0.2 percentage points higher than its previous projection in December 2025. It also expects growth of 1.9% next year. The outlook is based on a scenario in which the war in the Middle East is brought under control within one month.
ADB stated, "The forecast reflects stronger exports driven by a robust semiconductor industry, a gradual increase in consumption due to the delayed impact of interest rate cuts, and expectations of expanded government spending in strategic sectors such as semiconductors, defense, and biotechnology."
However, ADB also noted that downside risks remain, including external risks such as tensions in the Middle East and tariffs in the United States of America (U.S.), uncertainty over demand for artificial intelligence (AI), and rapid shifts in the semiconductor cycle.
For South Korea, ADB forecast this year’s inflation rate at 2.3%, 0.2 percentage points higher than its December 2025 projection. It expects inflation to ease to 2.0% next year. The figures reflect higher international oil and commodity prices due to the war in the Middle East, a weaker won, and anticipated price increases for electronic products.
At the same time, ADB expects government efforts to stabilize prices—such as fuel tax cuts and oil price caps—to help prevent a sharp spike in inflation.
ADB projected that developing economies in the Asia-Pacific region will grow by 5.1% this year, 0.5 percentage points higher than its forecast last December. It forecast the region’s inflation rate at 3.6%, up 1.5 percentage points.
skjung@fnnews.com Jung Sang-geun Reporter