OECD keeps South Korea's growth rate at 1.0%…also overtaken by Japan

The Organisation for Economic Co-operation and Development (OECD) raised its global economic growth outlook while keeping South Korea's growth rate unchanged at the same 1.0%. South Korea's growth rate was lower than those of major advanced economies such as the United States, Japan and Canada.

In its 'Interim Economic Outlook' report published on the 23rd, the OECD put this year's South Korean growth rate at 1.0%. It kept the previous June outlook (1.0%) unchanged. The OECD's Interim Economic Outlook is published twice a year, in March and September. The OECD's growth forecast is higher than those of the Bank of Korea (0.9%), the government (0.9%), the International Monetary Fund (IMF, 0.8%) and the Korea Development Institute (0.8%). The OECD assessed in the report that "the South Korean economy will continue its recent recovery."

The OECD raised this year's global growth rate to 3.2%, 0.3 percentage points higher than before. It also projected G20 growth at 3.2%, an upward revision of 0.3%. Growth forecasts for major countries were likewise revised upward. The United States was raised from 1.6% to 1.8%, China from 4.7% to 4.9%, Japan from 0.7% to 1.1%, and the United Kingdom from 1.3% to 1.4%. The OECD analyzed that, ahead of U.S. tariff increases, countries around the world proactively expanded export and import volumes, boosting global production and trade. It also evaluated that increased investment in AI-related equipment played a significant role in raising global growth. Although it revised up the global growth rate, analysts say South Korea's rate remained unchanged, reflecting its high dependence on exports.

Next year, South Korea's growth rate was also kept unchanged at 2.2%. Global growth for the same period was unchanged at 2.9%. While next year's growth rates for major countries are expected to be lower than this year, South Korea's is expected to rise significantly next year compared with this year due to base effects.

The OECD revised up its forecast for South Korea's consumer price inflation this year from 2.1% to 2.2%. It revised down G20 consumer inflation from 3.6% to 3.4%.

Reporter Kim Ik-hwan lovepen@hankyung.com