OECD Downgrades South Korea’s 2023 Growth Forecast

The Organization for Economic Cooperation and Development (OECD) lowered its 2023 growth forecast for South Korea to 1.6 percent, down from 1.8 percent in its previous outlook given in November. The OECD also lowered the inflation outlook for Korea to 3.6 percent from 3.9 percent as global inflation is expected to take a downward trajectory in most G20 countries.

The UK will be the only economy in the G20 apart from Russia to shrink this year, according to the OECD, as high inflation, the energy crisis and low productivity hinder its recovery.[0] The OECD still described the global economy as “fragile,” noting that downside risks prevail over upside risks due to a prolonged Ukraine war and disrupted supply chains, among others.[1]

The OECD, however, hinted that the global economy will gradually recover through 2024 following improved consumer sentiment, falling energy and food prices, along with the full-fledged reopening of the Chinese economy.[2] Korea and Australia will benefit from the expected growth rebound in China, offsetting the impact of tighter financial conditions, according to the OECD.[3]

0. “OECD says UK faces being only member of G7 in recession this year” Daily Mail, 17 Mar. 2023, https://www.dailymail.co.uk/news/article-11871867/OECD-says-UK-faces-member-G7-recession-year.html

1. “Asia's economic outlook ‘relatively strong' despite subdued global growth: OECD chief” CNA, 17 Mar. 2023, https://www.channelnewsasia.com/asia/oecd-secretary-general-mathias-cormann-economic-outlook-svb-inflation-growth-3353791

2. “OECD lowers 2023 growth outlook for Korea to 1.6%” 코리아타임스, 17 Mar. 2023, https://www.koreatimes.co.kr/www/biz/2023/03/488_347319.html

3. “OECD slashes S. Korea's 2023 growth outlook to 1.6 pct” Yonhap News Agency, 17 Mar. 2023, https://en.yna.co.kr/view/AEN20230317006300320

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