Seoul: The International Monetary Fund (IMF) on Tuesday revised down its growth forecast for South Korea's economy to 0.8 percent for 2025, citing lingering global uncertainty despite the potential easing of U.S. tariff measures. In its latest World Economic Outlook (WEO) report, the IMF trimmed its projection for Asia's fourth-largest economy by 0.2 percentage point from its previous forecast released in April. Meanwhile, the IMF revised its 2026 outlook for South Korea upward by 0.4 percentage point to 1.8 percent.

According to Yonhap News Agency, the IMF noted that risks to the outlook remain tilted to the downside, similar to the April 2025 WEO. However, it mentioned that global growth could be bolstered if trade negotiations result in a predictable framework and a reduction in tariffs. Recently, major economies have reached agreements with the U.S. administration, aimed at reducing Washington's "reciprocal" tariffs and sector-specific duties. Seoul officials have been intensifying diplomatic efforts to secure a last-minute deal as the U.S. plans to impose reciprocal tariffs starting Friday.

The IMF's latest forecast for South Korea aligns with or is slightly more pessimistic than projections from other major economic bodies. The Organization for Economic Cooperation and Development (OECD) projects a 1 percent expansion for South Korea in 2025, while the Bank of Korea (BOK), the Asian Development Bank (ADB), and the state-run Korea Development Institute (KDI) each forecast 0.8 percent growth.

The IMF highlighted the importance of reducing policy-driven uncertainty by establishing transparent and consistent trade frameworks. The report emphasized pragmatic cooperation to address issues where current international trading rules may not function as intended. This includes pursuing multilateral initiatives and modernizing trade rules.

Meanwhile, the IMF revised its global growth forecast for 2025 to 3 percent, an increase of 0.2 percentage points from its previous projection.