IMF lifts Korea's growth forecast to 2.6%, biggest upgrade among major economies

Korea notched the largest growth forecast upgrade among 30 major economies from the International Monetary Fund (IMF), which raised its projection for this year by 0.7 percentage points to 2.6 percent.

The rapid upturn from the April projection is attributed to better-than-expected exports driven by semiconductors, according to the Ministry of Finance and Economy on Wednesday quoting the latest report.

“Despite Korea's heavy dependence on Middle Eastern energy imports, the IMF said strong exports of semiconductors and AI hardware helped propel the country's first-quarter growth to an annualized, seasonally adjusted 7.5 percent in 2026, far exceeding its April forecast of 1.8 percent,” the Finance Ministry said.

An annualized rate takes a change measured over a short period and expresses it as if that same pace continued for a full year

The IMF identified Korea, alongside Taiwan, Thailand and Malaysia, as one of the world's top four net exporters of AI hardware that convers devices and chips tasked with training and powering AI.

The ongoing AI boom also prompted the institution to up its 2027 growth forecast for Korea by 0.4 percentage points to 2.5 percent.

The 2.6 percent forecast is on par with the projection of Organization for Economic Cooperation and Development (OECD). Brokerages are turning more bullish, with the average forecast of eight major investment banks reaching 3 percent as of end-June, according to the Korea Center for International Finance. J.P. Morgan was the most optimistic at 3.7 percent.

But the overall advanced economies are losing a bit of steam. The IMF expects the group of 41 wealthy nations — including the United States, Japan, Germany and Korea — to grow 1.7 percent in 2026, down 0.1 percentage point compared to what it predicted in April.

Growth in the United States is expected to remain unchanged at 2.3 percent while that of EU was trimmed to 0.9 percent, and Japan's to 0.6 percent.

BY PARK EUN-JEE [[email protected]]