The Asian Development Bank (ADB) has raised its 2025 growth forecast for South Korea to 0.9%, up 0.1 percentage point from two months ago. The multilateral lender cited consumption stimulus effects from a supplementary budget and reduced uncertainty following the conclusion of tariff negotiations as key factors behind the upgrade.
The ADB released its December 2025 Asian Economic Outlook on Wednesday. The bank issues annual forecasts in April, supplementary outlooks in July, revised forecasts in September, and additional supplementary outlooks in December when necessary.
In this latest supplementary outlook, the ADB raised Korea's 2025 economic growth forecast by 0.1 percentage point from September. The revision reflects consumer stimulus effects from government measures to boost the economy, global semiconductor demand, and reduced uncertainty following the tariff deal.
However, the ADB noted that downside risks remain, including weakness in the real estate market and the potential resurgence of global trade and geopolitical tensions. The bank also raised its 2026 growth forecast by 0.1 percentage point to 1.7%.
The ADB projected Korea's inflation rate at 2.1% for both this year and next, up 0.2 percentage point from September forecasts.
The bank pointed out that the recent depreciation of the Korean won and reduced fuel tax subsidies could add upward pressure on prices next year.
This year's inflation forecast reflects the impact of rising food prices and oil costs.
For the Asia-Pacific region, the ADB raised its 2025 growth forecast by 0.3 percentage point from September to 5.1%.
The upgrade reflects India's stronger-than-expected growth driven by robust domestic demand and solid export performance from the region's high-income, technology-focused exporting economies.
The 2026 growth forecast for the Asia-Pacific region was also raised by 0.1 percentage point from September to 4.6%.
The revision reflects eased trade uncertainty following trade agreements. However, the ADB expects economic growth to slow due to high U.S. tariffs and weakening global economic activity.
The ADB lowered its 2025 inflation forecast for the Asia-Pacific region by 0.1 percentage point from September to 1.6%, while maintaining its 2026 forecast at 2.1%.
