The International Monetary Fund(IMF) has projected that South Korea’s economy will enter a recovery phase in the second half of this year, with a clear rebound expected in 2026.

In its annual Article IV Consultation report released Tuesday, the IMF held its growth forecast at zero-point-nine percent for this year and one-point-eight percent for next year.

The report was based on interviews conducted in September with government agencies, including the finance ministry and the Bank of Korea.

It predicts that private consumption will recover in the second half of this year, supported by accommodative monetary and fiscal policy and improved consumer sentiment.

The IMF said domestic and global uncertainty will ease, and the effects of the 2025 supplementary budget will take hold next year.