Seoul:The ASEAN+3 Macroeconomic Research Office (AMRO) has revised its growth projection for South Korea's economy this year, estimating a 3.3 percent expansion, up from its previous forecast of 3.1 percent.

According to Yonhap News Agency, AMRO's updated projection was included in its quarterly report but did not provide detailed reasons for the upward revision from its July forecast. Looking ahead to 2027, AMRO anticipates Asia's fourth-largest economy to grow by 2.7 percent, an increase from the prior estimate of 2.2 percent.

The report also addressed inflation, forecasting a 2.7 percent rise in consumer prices for 2026, slightly higher than the earlier forecast of 2.6 percent. For 2027, the inflation prediction has been adjusted downward to 2.3 percent from 2.4 percent.

Last month, the Organization for Economic Cooperation and Development (OECD) upgraded its 2026 economic growth forecast for South Korea to 3.7 percent, attributing the increase to the country's strong export performance. This marks a significant rise from the OECD's June forecast of 2.6 percent.

Additionally, the Asian Development Bank (ADB) increased its 2026 growth projection for South Korea to 3.2 percent in September, up from 2.6 percent in July, highlighting robust exports and corporate earnings driven by the artificial intelligence boom.

AMRO also warned of potential challenges, including a slowdown in AI-related demand, which could impact exports and investment activities. Rising costs in energy, transportation, and production following the Middle East crisis may contribute to inflationary pressures, alongside climate change impacts on food prices.

The report further identified structural challenges in the Asian region, such as fragmentation and an aging population.