Sakai Ando, proper, an economist within the Worldwide Financial Fund (IMF)’s Asia and Pacific Division, speaks throughout an annual convention co-hosted by the Korea Institute for Worldwide Financial Coverage (KIEP) and the IMF in Seoul, Tuesday. Courtesy of the KIEP
An economist from the Worldwide Financial Fund (IMF) mentioned Tuesday that whereas Korea’s financial system is starting to point out indicators of a rebound, downward pressures proceed to problem Asia’s fourth-largest financial system, even because the broader Asian market is predicted to expertise a modest slowdown subsequent 12 months.
The evaluation was made throughout an annual convention co-hosted by the Korea Institute for Worldwide Financial Coverage (KIEP) and the IMF in Seoul, underneath the theme “Buffered Slowdown amid an Uneven World.”
In keeping with the KIEP, the occasion was organized to look at structural adjustments affecting the worldwide financial system, together with persistent commerce tensions, the normalization of financial insurance policies in main nations and geopolitical dangers, whereas discussing potential future coverage instructions.
Through the session, Sakai Ando, an economist within the IMF’s Asia and Pacific Division, projected that the Asia’s financial development price would regularly sluggish from 4.5 % in 2025 to 4.1 % in 2026.
For Korea, the IMF forecast development of 0.9 % for this 12 months and 1.8 % for subsequent 12 months.
“Development has been resilient within the first half of the 12 months regardless of commerce shocks, with a optimistic shock,” Ando mentioned, citing strong exports, coverage easing and a powerful know-how cycle, notably in semiconductors, a key Korean export.
He, nonetheless, highlighted main regional dangers, together with sudden shifts in new commerce and tariff insurance policies, decreased fiscal capability to reply to crises, concentrated investments in applied sciences similar to synthetic intelligence (AI), and potential monetary market disruptions that might curb funding.
“Dangers are additionally tilted to the draw back, reflecting commerce tensions,” he added.
The economist additional famous that financial easing is suitable in most nations, together with Korea.
He additionally emphasised that fiscal assist needs to be sustainable and underpinned by structural reforms.
Relating to the Financial institution of Korea’s potential coverage easing amid a weak Korean received, Ando advised that focused market interventions might be acceptable in some circumstances.
“Common precept of financial easing is suitable if inflation is beneath goal. In terms of overseas alternate issues, as an example, intervention is one solution to management overseas alternate,” he mentioned.
