The ASEAN+3 Macroeconomic Research Office (AMRO) raised its economic growth forecast for South Korea this year to 3.3%. The upgrade follows a sharp increase from 1.9% in April to 3.1% in July, with an additional 0.2 percentage point revision just three months later.
AMRO presented the projection in a revised regional economic outlook report released on the 5th, according to the Ministry of Economy and Finance. The agency expects growth of 2.7% next year. For this year's forecast alone, the figure has climbed 1.4 percentage points in six months.
AMRO raised its inflation projection for this year to 2.7%, up 0.1 percentage point from the July outlook. For next year, it lowered the estimate to 2.3% from 2.4%. AMRO publishes its regional economic outlook report each April, then revises it in January, July and October.
The organization projected that the combined economies of South Korea, China, Japan and the 10 ASEAN member states, including Indonesia and Vietnam, would grow 4.1% both this year and next. Export and investment demand tied to artificial intelligence will partly offset a domestic slowdown caused by rising energy prices, it said.
Still, AMRO assessed that downside risks dominate the outlook for the regional economy. It cited the possibility of a correction in stock markets driven by strength in technology shares, along with rising bond yields in major economies, as risk factors. The report also noted that additional protectionist measures could push up trade costs.
