OECD Cuts S. Korea’s 2024 Growth Outlook to 2.5 Percent

The Organization for Economic Cooperation and Development (OECD) slashed the growth outlook for the South Korean economy to 2.5 percent this year. The latest figure marked a 0.1 percentage point fall from its projection presented in May and is on a par with the forecasts by the International Monetary Fund, South Korea's finance ministry said. The South Korean government expected a 2.6 percent expansion, and the Bank of Korea (BOK) forecast a 2.4 percent growth this year, according to South Korea's News Agency (Yonhap). "Growth is projected to be stable in Korea, at 2.5 percent this year and 2.2 percent in 2025, with exports aided by ongoing strength in global semiconductor demand," the ministry cited the latest report by the organization as saying. Exports rose for the 11th consecutive month in August to US$57.9 billion, as exports of chips jumped 38.8 percent on-year to $11.9 billion, which was the highest volume for any August ever. The organization slashed its forecast for inflation in South Korea thi s year to 2.4 percent from the previous projection of 2.6 percent, while maintaining the figure for next year at 2 percent. The OECD recommended nations to continue to lower interest rates in case their inflation eases and the labor market remains stable, and how much and when to cut the rates should be data-dependent. It also called for "decisive" efforts to ensure debt-sustainability and better manage state finances with longer-term perspectives, according to the ministry. Despite moderating inflation, the BOK decided in August to keep the key rate at 3.5 percent, unchanged since February 2023, amid concerns over rising home prices and surging household debts. Source: Qatar News Agency