A forecast from a multilateral development bank indicates that Korea's growth rate will not exceed 1% this year.
The Asian Development Bank (ADB) projected Korea's economic growth rate for 2025 at 0.8% on the 23rd, downwardly revising its previous growth rate forecast of 1.5% announced in April by 0.7 percentage points (p). This means the growth rate forecast has been cut in half in just three months.
ADB expects that the slowdown in Korea's economic growth will result from decreased construction investment, sluggish exports, and weakness in the real estate market. The increase in U.S. tariffs and trade uncertainties were also cited as factors destabilizing the Korean economy. However, it noted that following the June elections, political uncertainties have been alleviated, and due to the new government's expansive fiscal policy, consumer spending is expected to show signs of recovery in the second half of the year.
It presented next year's growth rate for Korea at 1.6%, a downward adjustment of 0.3p from the previous forecast made in April. ADB analyzed that the trade uncertainties arising from the increase in U.S. tariffs will continue to be a burden on the Korean economy.
ADB projected the economic growth rate for the Asia-Pacific region at 4.7% for 2025, a downward adjustment of 0.2p from the previous estimate.
It forecasted a growth rate of 4.6% for 2026, down 0.1p from the forecast in April.
ADB predicted that growth would slow down due to the shrinkage of exports resulting from the increase in U.S. tariffs and global trade uncertainties, disruptions in maritime transport due to geopolitical crises such as conflicts in the Middle East and rising oil prices, as well as the prolonged slump in China's real estate market.