South Korea economic growth forecasts rise amid semiconductor export boom

Major domestic and international institutions are rapidly raising their economic growth forecasts for South Korea, driven by strong semiconductor exports and a recovery in domestic demand.

According to data compiled by Bloomberg, 14 out of 42 surveyed institutions now predict South Korea's real GDP growth will exceed 3.5% this year, a significant increase from just six institutions in June. Approximately 70% of the surveyed organizations expect growth of 3% or higher. Leading forecasts include 4.0% from Capital Economics and ING Financial Markets.

The median growth forecast of 3.3% aligns with the Bank of Korea's recent upward revision. Notably, 20 of the 42 institutions have issued forecasts higher than the Bank of Korea's 3.3% projection.

In contrast, outlooks for next year appear more cautious. The median forecast for next year's growth stands at 2.3%, which is lower than the Bank of Korea's projection of 2.9%. Most institutions (39 out of 42) anticipate next year's growth will fall below the central bank's expectations. Inflation forecasts have remained relatively stable, with the median consumer price inflation projection holding at 2.7%.