The Asian Development Bank (ADB) on Wednesday lowered its 2022 growth outlook for the South Korean economy to 3 percent amid the upsurge in COVID-19 cases and the Ukraine crisis.

The latest estimate by the Manila-based bank is lower than the 3.1 percent growth forecast made in December last year. The ADB forecast the South Korean economy will grow 2.6 percent next year.

Despite the downward revision, the ADB assessed the South Korean economy is expected to "settle into more sustainable growth" this and next year as exports will likely remain robust and private spending will improve.

The ADB's growth forecast is on par with the 3 percent estimates by the Bank of Korea and the International Monetary Fund. It is higher than the 2.7 percent growth forecasts by global credit appraisers Moody's Investors Service and Fitch Ratings.

Asia's fourth-largest economy has been on a recovery track on the back of robust exports. But it also faces growing uncertainty at home and abroad amid the fast spread of the omicron variant and Russia's invasion of Ukraine.

The ADB sharply raised its 2022 inflation outlook for South Korea to 3.2 percent from its December forecast of 1.9 percent. The bank expected South Korea's inflation growth to slow to 2 percent next year.

South Korea's consumer prices grew more than 4 percent for the first time in more than 10 years in March as the Ukraine crisis has jacked up oil prices.

Consumer inflation grew 4.1 percent on-year in March, accelerating from a 3.7 percent gain the previous month, according to government data.

The BOK said inflation will be under more upward pressure going forward, saying the growth of consumer prices will likely stay over 4 percent for the time being. The country's central bank expects annual inflation to rise 3.1 percent this year.

The ADB, meanwhile, lowered its 2022 growth outlook for 46 developing Asian countries to 5.2 percent from 5.3 percent. It forecast such countries to grow 5.3 percent in 2023.

Its inflation outlook for the developing Asian nations was raised to 3.7 percent this year from its December estimate of 2.7 percent. The bank expects their consumer prices to grow 3.1 percent next year. (Yonhap)