Asian Development Bank lowers Korea's growth forecast to 1.5% with another downgrade possible
![Currency traders watch monitors near a screen showing the Korea Composite Stock Price Index, top left, and the foreign exchange rate between dollar and Korean won, top center, at the foreign exchange dealing room of the KEB Hana Bank headquarters in central Seoul on April 9. [AP/YONHAP]](https://image.koreajoongangdaily.com/12319295.webp?imageId=12319295&width=960&height=640&format=jpg)
The Asian Development Bank (ADB) lowered Korea’s growth forecast to 1.5 percent for 2025, its second downward revision in four months.
The latest "Asian Development Outlook," released Wednesday, does not reflect the impact of new U.S. tariff measures, raising the possibility of another downgrade later this year.
The ADB had maintained a 2.3 percent forecast through September last year. It cut the figure to 2.0 percent in December, then lowered it by another 0.5 percentage points in this update.
Weak private consumption, high interest rates, household debt and political uncertainty are key domestic drags. Sluggish construction and external trade risks, including rising export competition with the United States and China, also weighed on the forecast.
Despite the downgrade, the ADB expects a recovery in the second half, driven by AI-related semiconductor exports, increased government spending, political stability and expansionary monetary policy.
Growth is projected to rebound to 1.9 percent in 2026.
The current forecast does not include the impact of reciprocal tariffs announced by the United States on April 2. If trade tensions worsen or talks on a proposed 25 percent tariff stall, the ADB may revise the outlook in a supplemental update expected in June or July.
The ADB also forecast inflation at 1.9 percent for 2025 and 2026, down 0.1 percentage points from its December outlook, citing lower oil prices and stable food and energy costs.
Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY JEONG JAE-HONG [paik.jihwan@joongang.co.kr]
