Seoul: Bank of Korea (BOK) Governor Rhee Chang-yong has projected that the economy, excluding the information technology (IT) sector, will grow by 1.4 percent this year, highlighting potential disparities across different sectors.

According to Yonhap News Agency, Rhee emphasized in his New Year's address that the IT sector is anticipated to drive growth this year due to a global semiconductor upcycle. Without the IT sector's contribution, economic growth is expected to be limited to 1.4 percent. In a recent outlook released in November, the BOK predicted that the economy would grow by 1.8 percent in 2026, an increase from last year's projected 1 percent expansion.

Rhee expressed concerns that the uneven pace of recovery across sectors does not represent a "sustainable or complete" economic recovery for the nation. He stressed the importance of continued structural reforms to address these disparities.

Regarding the foreign exchange market, Rhee noted that the won's recent valuation of 1,400 won against the U.S. dollar seems significantly misaligned with the economy's fundamentals. He warned that a weaker won could heighten inflationary pressures and disadvantage domestic-oriented companies, potentially exacerbating economic polarization.

Rhee identified the ongoing rise in overseas securities investments by local investors as a key factor in short-term supply-demand imbalances in the foreign exchange market. He called for a "comprehensive review" of its impact on economic growth and the development of the domestic capital market from a macroeconomic perspective.

He concluded by stating that, in the mid to long term, it is essential to enhance the competitiveness of domestic industries and expand investment incentives through reforms in capital market institutions. This would help address the local currency's weakness and bolster economic stability.