Seoul: The International Monetary Fund (IMF) has slightly raised its economic growth forecast for South Korea to 1.9 percent for the year 2026, as announced by the finance ministry on Monday.

According to Yonhap News Agency, the IMF’s latest World Economic Outlook report has increased its projection for Asia’s fourth-largest economy by 0.1 percentage point from its previous estimate released in October. The IMF has been steadily revising its growth outlook for South Korea upwards since July. The Ministry of Economy and Finance noted that the latest forecast surpasses the average growth projection of 1.8 percent for advanced economies.

The IMF’s revised forecast aligns with estimates from other major institutions and the South Korean government. Seoul has forecasted real GDP growth of 2 percent for the local economy this year, while the Bank of Korea has predicted a 1.8 percent growth. On the other hand, the Organization for Economic Cooperation and Development (OECD) projects a growth of 2.1 percent.

Previously, the IMF had indicated that South Korea entered a recovery phase in the second half of the previous year, driven by more accommodative fiscal and monetary policies and improved consumer sentiment. The economy is expected to further strengthen this year. However, the IMF has cautioned that risks to the global economy remain tilted to the downside.

The report identifies key downside factors, including concentrated investment in a limited number of artificial intelligence and advanced technology firms, persistently high trade uncertainty, geopolitical tensions, and elevated debt levels in major economies. The IMF releases its outlook reports four times a year, with comprehensive forecasts in April and October, while the January and July updates focus on approximately 30 major economies, including South Korea.