South Korea’s 2025 Growth Outlook Slashed To 1.6% Amid Martial Law Crisis

The Bank of Korea (BOK) has announced that South Korea's economic growth forecast for this year could be revised down to as low as 1.6% due to political instability from suspended President Yoon Suk Yeol’s martial law crisis and weakened domestic demand, Oh Seok-min reported for Yonhap News Agency.

The Finance Ministry previously forecast a 1.8% growth rate for 2025, citing heightened uncertainty both domestically and globally.

In November, the BOK projected 1.9% growth for 2025 but now anticipates an adjustment to between 1.6% and 1.7%.

“Political uncertainties stemming from the December martial law crisis have negatively impacted economic sentiment, potentially reducing growth by approximately 0.2 percentage points,” the central bank stated.

The official revision will be announced in February, and its final figure depends on the resolution of political instability, the government’s supportive measures, and the economic policies of the incoming U.S. administration.

The Finance Ministry previously forecast a 1.8% growth rate for 2025, citing heightened uncertainty both domestically and globally. With South Korea's potential growth rate estimated at 2%, this year could mark the first time the country's annual growth rate falls below the 2% threshold.