AMRO maintains 2022 growth outlook for South Korean economy at 3%

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Containers are stacked for outbound shipments at Gamman Pier in Busan on January 21. According to provisional counts by customs authorities, the country’s exports amounted to 34.4 billion dollars in the first 20 days of the year, up 22% from the previous year. (Yonhap)

An economic watchdog in Asia on Tuesday maintained its 2022 growth outlook for the South Korean economy at 3%, citing improved private spending despite heightened external economic risks.

The ASEAN+3 Macroeconomic Research Bureau (AMRO) projection remains unchanged from its January estimate and is in line with 3% growth estimates from the Bank of Korea and the International Monetary Fund.

The Singapore-based international organization predicts Asia’s fourth-largest economy will grow by 2.6% next year.

AMRO was established in 2011 to promote macroeconomic and financial stability in the Asian region, which includes the 10 members of the Association of Southeast Asian Nations (ASEAN) and its three South Asian partners. Northeast: South Korea, China and Japan.

The South Korean economy is on the road to recovery thanks to robust exports. But it has faced heightened economic uncertainty amid the rapid spread of the omicron variant and soaring energy costs caused by Russia’s invasion of Ukraine.

AMRO raised its 2022 inflation outlook for South Korea to 2.9% from its January estimate of 2.1% due to higher energy prices. The agency expects consumer price growth in Korea to slow to 1.9 percent in 2023.

Consumer prices in South Korea rose more than 4% for the first time in more than 10 years in March. Consumer inflation rose 4.1% year-on-year in March, after rising 3.7% year-on-year the previous month.

The BOK said inflation will come under more upward pressure going forward, raising the possibility that annual inflation growth could exceed its estimate of 3.1%.

Citing fallout from the Ukraine crisis, AMRO lowered the 2022 growth forecast for the ASEAN+3 region to 4.7% from its previous estimate of 4.9%.

AMRO cited the protracted war between Russia and Ukraine as a major economic risk for the ASEAN+3 region, as soaring energy prices risk hampering regional economic growth. (Yonhap)

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