Seoul: The Bank of Korea (BOK) is expected to raise its growth outlook for the South Korean economy this year to over 3 percent, economic experts here said Sunday, citing stronger-than-expected semiconductor exports and recovering domestic demand.
According to Yonhap News Agency, a recent survey of six economic analysts revealed that respondents anticipate the BOK revising its 2026 growth outlook from the current 2.6 percent to as high as 3.4 percent. "Given the stronger-than-expected exports led by semiconductors, increased government expenditure driven by higher tax revenues and a rebound in domestic demand, the country is likely to achieve economic growth of around 3 percent this year," said Ahn Jae-kyun, an analyst at Korea Investment and Securities Co., putting this year's economic growth outlook at 3.2 percent. Others provided a similar estimate of around 3.1 to 3.2 percent, with the highest estimate coming from Nomura Securities, which projected 3.4 percent annual economic growth.
"The BOK could take into consideration the semiconductor boom and the government's expansionary fiscal policy. We expect the central bank to sharply raise the growth forecasts for this year and next year," said Park Jeong-woo, an economist at Nomura. The experts' growth outlooks for next year ranged from 2.2 percent to 2.8 percent, the survey showed.
Most respondents expressed optimism that the semiconductor supercycle will continue to boost South Korea's economy, citing a supply and demand mismatch in the global semiconductor market. "While the demand for artificial intelligence (AI) inference is growing exponentially, the pace of semiconductor supply is relatively slow. A supply crunch is likely to continue longer, beyond 2027," Park from Nomura explained.
However, Joo Won, deputy director of economic research at Hyundai Research Institute, offered a cautionary perspective, suggesting the semiconductor supercycle could peak sooner than expected, given that August chip exports dropped from a month earlier. "The semiconductor market will remain strong until around the end of this year to the early half of next year," the analyst noted.
Many experts agreed that the central bank could significantly increase South Korea's account surplus estimate from the $250 billion announced in May. They reported that the country's account surplus for the first half of 2026 has already exceeded last year's annual record of $191 billion, the highest on record. Regarding consumer prices, experts largely expected the BOK to maintain its inflation rate estimate of 2.7 percent, citing inflationary pressures from rising oil prices and the high won-dollar exchange rate.