Overview

• An IMF mission to Seoul issued preliminary findings that point to a weak 2025 followed by a stronger 2026 as uncertainties ease.
• The Fund projects GDP growth of 0.9 percent in 2025 and 1.8 percent in 2026, with inflation near the 2 percent target next year.
• It attributes this year’s slowdown to prolonged domestic political and global trade policy uncertainties, noting semiconductor strength is offsetting weakness in other exports.
• The IMF says President Lee Jae Myung’s accommodative fiscal and monetary stance is appropriate given moderate inflation and a negative output gap, while urging policy agility.
• It urges measures to revive domestic consumption, diversify exports, accelerate productivity‑boosting reforms, and pursue long‑term fiscal changes for ageing costs, while welcoming Korea’s push on service exports and AI to bolster resilience.