From BigGo Finance · BigGo Finance · · 2m
South Korea's Economy Forecasted at 3.4-3.6% Growth
South Korea's Deputy PM predicts 3.4-3.6% economic growth this year as rating agencies affirm stable credit rating.
In brief
South Korea's Deputy PM predicts 3.4-3.6% economic growth this year as rating agencies affirm stable credit rating. South Korea's Deputy PM Lee Hyung-il forecasts 3.4-3.6% economic growth this year, above IMF's 3.3% projection, citing strong exports and facility investment. Originally reported by BigGo Finance.
South Korea's Deputy PM Forecast
South Korean Deputy Prime Minister Lee Hyung-il predicts 3.4-3.6% economic growth this year, exceeding IMF's 3.3% forecast.
“Our view is that it will likely exceed the 3.3% the IMF currently has”
Rating Agencies Affirm Stable Credit Rating
Moody's, Fitch, and S&P reaffirmed South Korea's stable credit rating, noting semiconductor and AI growth offset slowdown concerns.
“The semiconductor and artificial intelligence boom is offsetting concerns about a growth slowdown”
Government's Growth Projections
Government forecasts 3.0% growth, while IMF raised its 2026 projection to 3.3% from 3.0%.
“The government's official forecast is 3.0%”
Third-Quarter Economic Trends
Third-quarter exports and facility investment show strong growth, with rates rising to 1.8% and 0.6% in first and second quarters.
“Exports and facility investment are showing very good trends in the third quarter”
Potential Growth Rate Rebound
Lee predicts South Korea's potential growth rate will rebound from 1.94% to 2.14% this year, breaking its downward trend.
“The potential growth rate can break out of its continued downward trend and rebound”
Facility Investment Productivity
Lee links facility investment to productivity gains, citing U.S. experience where increased investment leads to higher potential growth.
“In the United States, we saw that when facility investment increases a lot and time passes, productivity rises”
Semiconductor Industry Outlook
Semiconductor demand remains high while supply is short, with efforts to narrow the supply gap continuing.
“Demand remains high while supply is short, so efforts to narrow the supply gap are continuing”
Rating Agencies' Interest in Tax Revenue
Rating agencies showed interest in how the government plans to use additional tax revenue, including the Future Response Fund.
“They showed considerable interest in ways to use additional tax revenue”
Future Response Fund Plan
Government will use excess tax revenue to reduce government bond issuance and stabilize the bond market.
“We will accumulate large-scale reserve resources through the Future Response Fund”
Economic Forecast System Overhaul
Government plans to add two mid-year revised forecasts to its current twice-yearly economic forecast system starting next year.
“We need to issue forecasts more frequently starting next year”
Multilateral Bank Cooperation
South Korea signed AI cooperation hubs with EBRD and CABEI, and discussed SMR technology with EBRD.
“The idea is to combine South Korea's technological capabilities with the development cooperation capacity of multilateral development banks”
Bilateral Meetings with Finance Ministers
Lee met with U.S., Swiss, Saudi, and Polish officials to discuss economic cooperation and strategic investments.
“He introduced a plan to establish a strategic sovereign wealth fund for investment in strategic industries”
What to remember
South Korea's Deputy PM Lee Hyung-il forecasts 3.4-3.6% economic growth this year, above IMF's 3.3% projection, citing strong exports and facility investment.
