The International Monetary Fund (IMF) raised its 2026 economic growth outlook for Korea to 1.9 percent, Monday, up from its previous forecast of 1.8 percent last October.   The revised projection for Asia’s fourth-largest economy is higher than the 1.8 percent growth forecast for advanced economies.   It also reflects brighter prospects for the country, in line with projections from institutions both locally and abroad, compared with 2025 when growth was estimated at just 1 percent.   For 2026, the Ministry of Economy and Finance projects 2 percent growth, the Bank of Korea forecasts 1.8 percent and the OECD expects 2.1 percent.   The IMF did not elaborate on the details behind its upward revision for Korea’s outlook.   Meanwhile, it noted that downside risks to the global economy stemming from changes in trade policies are balanced by upside factors, including a surge in artificial intelligence (AI) investment, fiscal and monetary support and accommodative financial conditions.   It accordingly revised up its world economic growth forecast for 2026 forecast by 0.2 percentage points to 3.3 percent.   It also raised outlook for the group of 41 advanced economies, including the United States, Germany, Japan, the United Kingdom, France and Korea, up by 0.2 percentage points to 1.8 percent for 2026.   For the Eurozone, 2026 growth outlook was revised upward from 1.1 percent to 1.3 percent, despite constraints such as high energy costs and a stronger euro, supported by fiscal stimulus in Germany and robust growth in Ireland and Spain.   By country, the U.S. growth rate was raised from 2.1 percent to 2.4 percent for 2026, reflecting the effects of fiscal stimulus and interest rate cuts, easing of trade barrier pressures, strong third-quarter 2025 performance and the potential for post-shutdown recovery.   China saw its 2026 growth outlook raised by 0.3 percentage points to 4.5 percent. Germany and India also recorded increases of 0.2 percentage points to 1.1 percent and 6.4 percent, respectively, while Japan and France saw their forecasts improved by 0.1 percentage points to 0.7 percent and 1 percent.   The U.K. outlook remained unchanged at 1.3 percent.   Despite the projected global recovery, the IMF assessed that risks to the global economy remain tilted to the downside, citing concentrated investment in a small number of AI and advanced-technology firms, persistently high trade uncertainty, geopolitical tensions, and elevated debt levels in major economies.   In particular, the IMF warned that, if expectations for AI-driven productivity and profitability weaken, a sharp correction in asset prices could occur, potentially triggering the transmission and amplification of financial risks.   Nevertheless, it noted that continued easing of trade tensions and improvements in medium-term productivity through broader adoption of AI could serve as upside factors for the global economy.   As for global inflation, the IMF said it expects inflation to continue moderating to 3.8 percent in 2026, down from an estimated 4.1 percent in 2025, supported by falling energy prices.     (ICE SEOUL)

Fonte notizia: The Korea Times