S. Korea Maintains 2025 Growth Outlook at 0.8 Percent
(MENAFN) South Korea’s state-run economic think tank has maintained its 2025 growth projection at a modest 0.8%, citing persistent weakness in the construction sector and deteriorating trade dynamics impacted by U.S. tariffs.
The Korea Development Institute (KDI) announced Tuesday that real gross domestic product (GDP), adjusted for inflation, is still expected to expand by 0.8% in 2025—unchanged from its earlier forecast released three months ago. The institute projected a rebound to 1.6% growth in 2026.
The persistently low growth forecast was due to the weak performance of the construction industry and deteriorating trade conditions, impacted by the imposition of tariffs by the U.S.
Construction investment is now expected to plunge 8.1% this year, a sharper decline than the 4.2% drop initially forecast in the prior outlook.
Goods exports are projected to rise 1.2% in 2025, following a 6.4% expansion in the previous year, KDI stated. Meanwhile, outlooks for private consumption and facility investment were revised upward by 0.2 and 0.1 percentage points respectively.
South Korea's current account surplus is expected to reach $106.2 billion in 2025, before narrowing to $91.2 billion in 2026.
The consumer price index (CPI) is forecast to increase by 2.0% in 2025 and by 1.8% the following year, according to the think tank.
In the labor market, KDI anticipates 150,000 new jobs in 2025, followed by 110,000 positions in 2026.
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