IMF slashes S. Korea's growth projection by half for 2025 amid a "new high" in uncertainties

And the world economy is already being swayed by Trump's tariff policies.

According to the IMF, the South Korean economy will see just 1% growth this year due to trade uncertainties sparked by the tariff push.

Our Moon Hye-ryeon has more.

The International Monetary Fund has sharply lowered its forecast for South Korea’s economic growth amid rising trade tensions and heightened policy uncertainty.

In its latest economic outlook, the IMF now expects the economy to grow by just one percent in 2025 a full percentage point lower than its January projection.

The estimate was presented in the report's appendix without further commentary, with the IMF’s forecast the lowest among projections for South Korea from major institutions.

The Korea Development Institute forecast a growth of 1-point-6 percent for the year, while the OECD and the Bank of Korea’s projections came in at 1-point-5 percent.

However, the BOK said last week, following its Monetary Policy Committee meeting, that it was likely to cut its economic growth projection as it expects growth in the first quarter of the year to be lower than previously estimated.

The IMF also revised down its global forecast by point-five percentage points.

The revised outlook with the expectation that the world economy will grow by 2-point-8 percent reflects what the agency described as a “new high” in uncertainties spurred by escalating trade tensions.

In response to these volatile conditions, the IMF introduced a new forecasting method.

Alongside baseline projection based on data available as of early April, the outlook includes two alternative scenarios that account for key tariff-related developments.

Prior to the new tariff announcement by the United States on April 2nd, global growth was projected at 3-point-2 percent, factoring in high oil prices and U.S. trade policy.

After tariff suspensions and retaliatory measures on April 9th, the forecast dropped to 2-point-8 percent, suggesting that gains from delayed tariffs are outweighed by slower growth in the U.S. and China.

The U.S. saw one of the biggest downward revisions, with 2025 growth now forecast at 1-point-8 percent, down point-nine percentage points — while China’s growth forecast was also lowered to 4 percent.

To mitigate the growing risks, the IMF recommended working toward a more predictable trade environment through regional and multilateral agreements and stressed the importance of balanced monetary policy to maintain financial stability and anchor inflation expectations.

Moon Hye-ryeon, Arirang News.