The International Monetary Fund on Oct. 11 raised its forecast for Korea's economic growth this year to 2.6%. Shown is a busy street with commuters on the morning of Oct. 5 in the Gwanghwamun area of downtown Seoul. (Yonhap News)

By Xu Aiying

The International Monetary Fund (IMF) forecasts Korea's economic growth this year at 2.6%. 

The Ministry of Economy and Finance on Oct. 11 said the IMF in its World Economic Outlook report raised Korea's growth projection to 2.6% from 2.3% in July.

The figure is the same as those of the Bank of Korea and Asian Development Bank (ADB).

The IMF forecast inflation in Korea at 5.5%, up from 4% from three months ago and higher than the figures of the Korean government (4.7%), ADB (4.5%), and the Organisation for Economic Co-operation and Development and Bank of Korea (5.2%). 

The IMF maintained its 3.2% growth forecast for the global economy this year. 

The U.S. economy was forecast to grow 1.6%, down from 2.3%, Japan 1.7%, the same as in July, and the U.K. 3.6%, up four-tenths of a percentage point. The projection for China was 3.2%, down a tenth of a point.  

From next year, the IMF said Korea's growth would see a downward trend to 2%, down from 2.1%, amid an intensifying economic slowdown worldwide.

The fund's forecast for global growth next year was 2.7%, down from 2.9%.

"Global economic activity is experiencing a broad-based and sharper-than-expected slowdown, with inflation higher than seen in several decades. The cost-of-living crisis, tightening financial conditions in most regions, Russia's invasion of Ukraine, and the lingering COVID-19 pandemic all weigh heavily on the outlook," the IMF said, "This is the weakest growth profile."

"The IMF in this forecast named high inflation, high exchange rates and prolonged risk factors as the major causes of high downside risks for the economy," the ministry added. "We will pursue monetary and fiscal policies with the top priority being control of inflation."  

xuaiy@kroea.kr