Anchor: Following the April edition of the International Monetary Fund’s World Economic Outlook earlier in the week, the organization’s Asia director has attributed South Korea’s weakened forecast for this year to the struggling semiconductor sector. However, he estimates that the second half of 2023 will see improvement driven by growth in China.
Tom McCarthy has more.

Report: The International Monetary Fund has attributed the reduced growth forecast for South Korea in its latest World Economic Outlook to the deteriorating semiconductor industry.

Speaking in a press conference at the World Bank-IMF Spring Meeting in Washington on Thursday, IMF director of the Asia and Pacific Department Krishna Srinivasan addressed questions about the one-point-five-percent projection for South Korea, down by zero-point-two percentage points from the January outlook for 2023.

[Sound bite: Krishna Srinivasan - director of the Asia and Pacific Department of the IMF]
“Why have we marked down our forecast for Korea? This reflects a variety of factors, or a combination of factors. One is, of course, there’s been a worse than expected global semiconductor cycle which has a bearing on Korea, which is a big player in this market, and that affects both exports and investment.”

In addition to the effects of the worsening chip sector, domestic factors were blamed for driving down consumption.

[Sound bite: Krishna Srinivasan - director of the Asia and Pacific Department of the IMF]
“We’ve also seen slowing consumption following the post-COVID surge, and also the impact of monetary policy tightening, and the ongoing correction in the housing market. So, all that feeds into domestic demand waning compared to what we had in the past.”

Despite the lowered outlook, the IMF official expressed expectations that South Korea will see improvement in the second half of the year on the back of external demand from China.

The IMF predicts that China will see growth of five-point-two percent in 2023, a figure unchanged from the January forecast.
Tom McCarthy, KBS WORLD Radio News.