The International Monetary Fund (IMF) kept its 2026 growth forecast for South Korea unchanged at 1.9 percent despite the Middle East crisis. The institution raised its inflation outlook for this year by 0.7 percentage point to 2.5 percent, citing rising global oil prices. The Ministry of Economy and Finance said strong exports and effects from a supplementary budget kept the growth outlook steady.
The International Monetary Fund (IMF) kept its 2026 growth forecast for South Korea unchanged at 1.9 percent in its World Economic Outlook report released on Tuesday. Despite the Middle East crisis, the outlook for Asia's fourth-largest economy held steady, while the global growth projection was cut by 0.2 percentage point from January to 3.1 percent.
"Despite the impact of the Middle East situation, the country's growth outlook remained unchanged on the back of strong exports and offsetting effects from a supplementary budget," the Ministry of Economy and Finance said, citing the IMF report. "The government will maintain the current emergency response system amid heightened uncertainties and swiftly implement measures to stabilize prices, supply chains and financial markets," it added.
The IMF raised South Korea's inflation forecast for this year to 2.5 percent, up 0.7 percentage point, due to supply disruptions pushing up global oil prices from the Middle East crisis. The projections assume the conflict, which began in late February following U.S.-Israeli strikes on Iran, will end within weeks, with energy and other goods production and exports normalizing from mid-2026.
The IMF forecast exceeds the Organization for Economic Cooperation and Development (OECD) projection of 1.7 percent, downgraded last month from 2.1 percent in December. South Korea's government and Bank of Korea (BOK) had forecasted 2.0 percent earlier, but the BOK said last week that growth momentum has slowed more than expected due to the crisis and will likely fall below the prior outlook.
The IMF issues outlook reports four times a year—in January, April, July and October—with April and October editions covering all member countries.
