[경제] KDI: “Korean economy will grow 2% next year even without Trump tariff hike”

KDI “Currently exports are good, but domestic demand is weak”
KDI “Korean economy will grow by 2% next year…at the level of potential growth rate”
“Export growth rate will decrease from 7% this year to 2.1% next year.”
“Interest rate cuts are not a panacea, but interest rates need to be lowered further.”

[앵커]

Due to sluggish domestic demand, major institutions’ forecasts for Korea’s economic growth rate are being revised downward one after another.

The Korea Development Institute and KDI also predicted that our economy will grow only 2.2% this year and 2% next year even without the Trump administration’s tariff increase.

Reporter Seung-eun Lee reports.

[기자]

The Korea Development Institute (KDI), a national research institute, lowered its economic growth forecast for this year by 0.3 percentage points for the first time in three months.

It was lowered from the original 2.6% to 2.5% and then again to 2.2%.

KDI diagnosed that although exports are currently showing a good trend, domestic demand is showing a weak trend, with sluggish construction investment deepening and private consumption remaining at a low growth rate.

At the same time, it was revealed that the interest rate cut was later than expected and the resulting negative impact was significant.

KDI also lowered its growth forecast for next year by 0.1%p.

While the world economy is expected to grow by 3%, similar to this year, our economy is expected to grow only 2%, which is the potential growth rate, next year.

Although domestic demand will partially recover, exports are expected to increase by only 2.1% next year from 7% this year.

Although the Trump administration’s tariff increase is expected to take effect in 2026, it is expected that companies around the world will reduce investment and restrict exports due to policy uncertainty.

At the same time, he explained that if the US tariff increases proceed more quickly, there is a possibility that this growth rate will not be achieved.

China’s economic downturn and worsening financial health of construction companies were also cited as other downside risks.

KDI agrees with the Bank of Korea governor that lowering interest rates is not a panacea, but emphasized that interest rates must be lowered further nonetheless.

[정규철 / 한국개발연구원 KDI 경제전망실장 : 통화정책이 물가에 조금 더 집중하고 금융 안정에 대해서는 거시건전성 정책으로도 우리가 또 다룰 수 있기 때문에 그렇게 역할 분담을 하면 좋겠다는 그런 제안을 드렸습니다.]

He also emphasized that the growth rate will only be around 1% in the next two to three years due to population decline and other factors, and that structural reform is needed to create a dynamic economy in which new companies can easily enter.

He suggested that fiscal policy should focus on securing long-term fiscal soundness, citing the high level of management fiscal deficit.

This is Seung-eun Lee from YTN.

Video editing: Lee Eun-kyung
Design: Seungmin Baek

YTN Lee Seung-eun ([email protected])

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