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OECD maintains rosy 2.2 percent annual growth outlook for Korea in 2026

Published: 23 Sep. 2025, 18:58 Updated: 23 Sep. 2025, 19:36

YOON SO-YEON
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Cargo containers and cars ready to be shipped are stacked at the Pyeongtaek Port in Gyeonggi on Sept. 4. [YONHAP]

The Organisation for Economic Cooperation and Development (OECD) maintained its 1.0 percent annual growth outlook for 2025 and 2.2 percent for 2026 in its interim report on Tuesday, keeping a moderately optimistic forecast for the country's economy next year.

In Tuesday's OECD report, published under the title "Finding the right balance in uncertain times," the OECD projected a 3.2 percent overall economic growth for 2025, 0.3 percentage points higher than the 2.9 percent growth outlook that the global agency had compiled in its June report. The 2026 projection was maintained at 2.9 percent, the same as the June report.

The OECD assessed that the global economy "remained resilient" on the back of front-loading of shipments before tariff hikes, increased trade activities and investment in AI. Some economies, however, showed signs of "softening" in industrial production and retail consumption, as well as in their labor markets, according to the report.

Next year's growth projection was not elevated due to decreased effects of front-loading, as well as trade headwinds including higher tariffs and uncertainties of economic policies that will likely discourage trade and investment sentiment, hence the maintenance of the 2026 outlook. The exact figures for 2025 and 2026 were applied to the Group of 20 (G20) economies.

By country, U.S. growth is expected to slow to 1.8 percent in 2025 and 1.5 percent in 2026, as additional tariff hikes and policy uncertainty persist. The eurozone is projected to grow 1.2 percent in 2025 and 1.0 percent in 2026, with easier credit conditions partly offsetting trade frictions and rising geopolitical risks. Japan is forecast to grow 1.1 percent in 2025 and 0.5 percent in 2026, supported by solid corporate profits and investments. China is expected to decelerate to 4.9 percent growth in 2025 and 4.4 percent in 2026, as the benefits of front-loading fade, higher tariffs on imports take effect and fiscal spending tightens starting in the latter half of 2025.

Automobiles ready to be exported are parked at the Pyeongtaek Port in Gyeonggi on Sept. 16. [YONHAP]

For Korea, the OECD projects that "the recent rebound in Korea is projected to continue," with growth of 1.0 percent in 2025 and 2.2 percent in 2026, unchanged from its June outlook — a fairly positive estimate, given that most major economies are expected to slow next year compared to this year.

Inflation in Korea is projected at 2.2 percent in 2025, up 0.1 percentage points from June, and 1.9 percent in 2026, down 0.1 percentage points. Inflation in the G20 economies is expected to decline to 3.4 percent in 2025, down 0.2 percentage points from the June forecast, and to 2.9 percent in 2026, a decrease of 0.3 percentage points. In the United States, however, tariff hikes are expected to further fuel inflation, with stronger pass-through to final goods prices and likely keep the annual inflation above target through 2026.

The OECD publishes its economic outlook twice a year, between May and June and November and December, covering the global economy, OECD member states and G20 countries. Its interim economic outlook is released twice a year in March and September, focusing only on the global economy and G20 countries.

BY YOON SO-YEON [[email protected]]