ADB maintains S. Korea's 2025 growth forecast at 0.8%

The Asian Development Bank kept its 2025 growth outlook for the South Korean economy steady at 0.8 percent, Seoul's finance ministry said Tuesday.

In July, the Manila-based bank projected 0.8 percent growth for South Korea, down 0.7 percentage point from its previous 1.5 percent forecast in April, citing slower export growth, a sluggish construction sector and a weak real estate market.

The ADB's latest forecast is bleaker than the 0.9 percent growth outlooks made by the Bank of Korea, the South Korean government and the International Monetary Fund.

The Organization for Economic Cooperation and Development has projected 1 percent growth for the South Korean economy.

The ADB noted the country's expansionary fiscal policy and a key interest rate cut may help support a recovery in domestic demand this year, but cited the possibility of additional tariffs by the United States and sluggish construction activity as downside risks.

For next year, the ADB expected the South Korean economy to expand 1.6 percent.

In late July, South Korea and the US agreed on a framework tariff deal, under which Washington would lower "reciprocal" tariffs for South Korea to 15 percent from the proposed 25 percent in return for Seoul's $350 billion investment in the US.

But the two sides have yet to finalize details.

Trump has insisted that South Korea provide the investment funds "up front," while Seoul has said that doing so without securing an unlimited currency swap line as a safeguard could trigger a financial crisis. (Yonhap)