Seoul: Major global investment banks' average forecast for South Korea's economic growth in 2026 has reached 3 percent for the first time, supported by robust semiconductor exports amid the artificial intelligence (AI) boom.

According to Yonhap News Agency, growth forecasts for South Korea's real gross domestic product (GDP) in 2026 by eight major investment banks, including JP Morgan and Citi, averaged 3 percent at the end of June, up 0.2 percentage point from a month earlier, based on data compiled by the Korea Center for International Finance. This marks the first instance where the average forecast has hit the 3 percent level.

The average forecast stood at 2 percent at the end of last year and experienced a gradual increase, reaching 2.1 percent in January, 2.4 percent in April, and 2.8 percent in May. Notably, JP Morgan raised its prediction to 3.7 percent in June, a 0.7 percentage point increase from 3 percent the previous month. Similarly, Citi adjusted its forecast to 3.5 percent from 3 percent within the same timeframe.

Barclays and Goldman Sachs each projected a 2.7 percent growth, while HSBC and UBS forecasted 2.8 percent each. Bank of America anticipated a 3.1 percent growth rate, whereas Nomura predicted 2.4 percent growth.

The upward revisions in these forecasts are largely attributed to strong semiconductor exports driven by increasing global demand for AI-related chips. In June, South Korea's exports hit a record US$102.25 billion, a 70.9 percent surge from the previous year, surpassing the $100 billion mark for the first time. Semiconductor exports alone nearly tripled, reaching a record $44.82 billion.

The latest data from the Bank of Korea (BOK) indicated that the country's GDP expanded by 1.8 percent in the first quarter, slightly above the central bank's preliminary estimate. In light of this, it is widely expected that the BOK will revise its 2026 growth forecast in August, up from its current projection of 2.6 percent.