Korea has a well-diversified and prosperous economy with steady real economic growth. We estimate real GDP per capita will grow by an average 2.2% in 2022-2025. Korean economic growth will likely be stronger than that of most high-income economies in the next three to five years, amid global economic uncertainties. Potential security threats that North Korea poses weigh on our otherwise strong institutional assessment of Korea. General government deficits could continue for the next two years, although we expect a return to fiscal balance in 2024-2025. Contingent liabilities associated with North Korea and the debts of government-related entities continue to weigh on fiscal metrics. Korea's credible monetary policy regime is a credit strength in the current uncertain environment. An actively
