Seoul: The Bank of Korea (BOK) has announced an upward revision of its economic growth forecast for South Korea, projecting a 3.3 percent increase for the year 2026. This adjustment is largely attributed to robust semiconductor exports, driven by consistent demand for artificial intelligence (AI) infrastructure.

According to Yonhap News Agency, the new forecast signifies a 0.7 percentage-point rise from the BOK's earlier prediction of 2.6 percent made in May. This marks the second upward revision from the central bank since its initial 2 percent growth forecast in February. The current estimate represents the highest growth forecast since 2021, when the BOK projected a 4.7 percent growth rate.

The BOK's revised growth outlook surpasses the South Korean government's projection of 3 percent released last month. Additionally, various global investment banks have adjusted their growth forecasts for South Korea to 3 percent or higher, with Moody's forecasting 3.5 percent and Morgan Stanley anticipating 3.4 percent growth.

Looking ahead to 2027, the central bank has set its growth forecast at 2.9 percent, an increase from the 2.1 percent estimate in May. The South Korean economy showed a growth of 1.8 percent in the first quarter compared to the previous quarter, representing the strongest quarterly expansion since the third quarter of 2020, which saw a growth of 2.2 percent. In the second quarter, the economy expanded by 0.6 percent, significantly surpassing the BOK's May forecast of 0.2 percent growth.

The BOK has maintained its earlier forecasts for consumer price inflation, predicting rates of 2.7 percent in 2026 and 2.3 percent in 2027.