The International Monetary Fund raised its growth forecast for South Korea this year to 3.3%, saying a chip boom will offset the shock from war in the Middle East. It recommended, however, that the country set aside the temporary windfall tax revenue generated by semiconductors to prepare for future crises.
The IMF presented the 3.3% forecast at the IMF-World Bank annual meetings held in Thailand on the 13th, up 0.7 percentage points from its July projection of 2.6%. The figure is lower than the 3.7% forecast by the Organisation for Economic Co-operation and Development and matches the Bank of Korea's projection. The IMF put global growth this year at 3.1%.
The fund voiced concern over Korea's expansionary fiscal stance. "Korea is at the forefront of artificial intelligence development and is reaping considerable benefits on the fiscal side as well," the IMF said, while stressing that "a portion of the excess tax revenue should first be saved in preparation for a deterioration in conditions."