The Organisation for Economic Co-operation and Development (OECD) raised its 2025 growth forecast for South Korea to 2.6% from 1.7% in its previous March outlook, an upward revision of 0.9 percentage point, the organization said Wednesday. The revision marks the largest upward adjustment among countries for which forecasts were released.
The OECD also estimated that Korea's nominal growth rate would reach 10.4% this year. If realized, it would mark the first time the figure has surpassed 10% since 2002, when it reached 11.0%.
In its March outlook, the OECD had lowered Korea's growth forecast to 1.7% from 2.1%, projecting that the fallout from the Iran war would weigh on overall growth. That outlook, however, was reversed in just three months as the semiconductor industry maintained an unexpectedly strong upswing. "Demand for advanced semiconductors has been stronger than expected, with export expansion driving growth and private investment, while consumption is also expected to recover gradually," the OECD said. The latest outlook assumes that the Bank of Korea will raise its benchmark interest rate once this year.
In contrast to Korea, the OECD lowered its global growth forecast. The organization cut its 2025 world growth projection to 2.8% from 2.9%, a downward revision of 0.1 percentage point. The decision reflects the assessment that the Middle East conflict, rising energy prices, and trade disruptions stemming from the blockade of the Strait of Hormuz are weighing on the global economy.
