BOK expected to raise Korea's 2026 growth estimate to over 3%: experts

The Bank of Korea (BOK) is expected to raise its growth outlook for the Korean economy this year to over 3 percent, economic experts here said Sunday, citing stronger-than-expected semiconductor exports and recovering domestic demand.

According to a recent survey on six economic analysts conducted by Yonhap News Agency, respondents expect the BOK to revise its 2026 growth outlook from the current 2.6 percent to as high as 3.4 percent.

"Given the stronger-than-expected exports led by semiconductors, increased government expenditure driven by higher tax revenues and a rebound in domestic demand, the country is likely to achieve economic growth of around 3 percent this year," said Ahn Jae-kyun, an analyst at Korea Investment & Securities., putting this year's economic growth outlook at 3.2 percent.

Others gave a similar estimate of around 3.1 to 3.2 percent, with the highest estimate coming from Nomura Securities, which projected 3.4 percent annual economic growth.

"The BOK could take into consideration the semiconductor boom and the government's expansionary fiscal policy. We expect the central bank to sharply raise the growth forecasts for this year and next year," said Park Jeong-woo, an economist at Nomura.

The experts' growth outlooks for next year were between 2.2 percent to 2.8 percent, the survey showed.

Most of the respondents were positive that the semiconductor supercycle will likely continue providing an upward momentum to Korea's economy, citing a supply and demand mismatch in the global semiconductor market.

"While the demand for artificial intelligence (AI) inference is growing exponentially, the pace of semiconductor supply is relatively slow. A supply crunch is likely to continue longer, beyond 2027," Park from Nomura said.

Joo Won, deputy director of economic research at Hyundai Research Institute, offered a cautionary outlook, saying the semiconductor supercycle could peak out sooner than expected, noting that August chip exports dropped from a month earlier.

"The semiconductor market will remain strong until around the end of this year to the early half of next year," the analyst said.

Most of the experts agreed the central bank could sharply raise Korea's account surplus estimate from $250 billion announced in May. They said the country's account surplus for the first half of 2026 has already topped last year's annual tally of $191 billion, which was the highest on record.

On consumer prices, experts widely expected the BOK to maintain its inflation rate estimate of 2.7 percent announced in May, citing inflationary pressures from rising oil prices and the high won-dollar exchange rate.