# 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. - Title: South Korea's Economy Forecasted at 3.4-3.6% Growth | Shortify - Summary: 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… - Keywords: south korea, lee hyung-il, economy, growth forecast, imf, credit rating, semiconductor, ai boom, future response fund, finance, markets, South - Source: BigGo Finance — https://finance.biggo.com/news/d6b1a9f0-1352-4ab6-8bc1-fc77c5dd6524 - Author: BigGo Finance - Published: 2026-10-18T03:25:19+00:00 - Read time: 1 min - Topics: south korea, lee hyung-il, economy, growth forecast, imf, credit rating, semiconductor, ai boom, future response fund, finance, markets ## 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 ## Key takeaway 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.