Monetary policy relaxation is expected to support South Korea’s economic rebound, according to the International Monetary Fund, which noted the country has adequate room for such measures. Following its annual assessment, the IMF stated that with inflation expectations stable and price risks generally balanced, easing monetary conditions could strengthen the recovery process. The organization concluded its review on Wednesday after a routine country consultation.
The IMF forecasts that South Korea, Asia’s fourth-largest economy, will grow by 0.9% this year. It projects headline inflation to remain around 2% for both the current and the following year. The outlook reflects a cautious but stable macroeconomic environment, allowing policymakers flexibility in adjusting interest rates.
The statement emphasized that timely policy adjustments could enhance growth momentum without jeopardizing price stability. While global uncertainties persist, the central bank’s ability to act remains intact due to well-managed inflation expectations.
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Monetary policy easing should help South Korea’s economic growth, IMF says
SEOUL, Sept 24 (Reuters) – South Korea ‘s economic growth will be supported by some further easing in monetary policies as it has “sufficient policy space”, the International Monetary Fund said on Wednesday. n n”With inflation expectations well-anchored and risks to inflation broadly balanced, monetary easing will help bolster the growth recovery,” the IMF said in a statement, wrapping up an annual country visit. n nSign up here. n nThe IMF expects Asia ‘s fourth largest economy to expand 0.9% this year, with headline inflation of about 2% both this year and the next. n nReporting by Cynthia Kim; Editing by Clarence Fernandez