Institutions at Planning Ministry Roundtable Project "Korean Economic Growth Rate at 2.5–3.0% This Year"

Yonhap News Agency

Economists from major research institutes and investment banks (IB) who attended the macroeconomic expert roundtable hosted by the Ministry of Planning and Budget projected South Korea’s economic growth rate for this year at between 2.5% and 3.0%.

According to the Ministry of Planning and Budget, at the macroeconomic expert roundtable held on the 20th and presided over by Budget Policy Chief Cho Yongbeom, major institutions noted that the first quarter growth rate (1.7%) significantly exceeded the previous forecast (0.9%), citing robust semiconductor exports and the government’s proactive supplementary budget as the contributing factors.

The meeting was attended by the Korea Development Institute (KDI), Samsung Global Research, Hyundai Research Institute, JP Morgan, Citibank, and BNP Paribas.

The experts anticipated that the economic expansion phase, with the growth rate surpassing the potential growth rate, would continue into next year. However, they pointed out several major risk factors for the Korean economy, including inflationary pressures from the prolonged Middle East conflict, instability in supply chains, and K-shaped polarization in growth between the semiconductor sector and other industries.

They also emphasized the need for close monitoring of the sustainability of the semiconductor boom cycle. Park Seokgil, Head of JP Morgan’s Seoul branch, commented on inflation, stating, “There is a mix of the government’s price stabilization policy effects and upward pressure on oil prices,” and added, “While the impact of energy shocks on inflation is uncertain, it is expected to be mitigated through policy measures.”

The experts also stressed the active role of fiscal policy, urging the Ministry to ensure coordination between monetary and fiscal policy, seek solutions to structural issues, and stabilize market sentiment through consistent government policy messaging.

Joo Won, Head of Research at Hyundai Research Institute, stated, “It is essential to strengthen the stabilization function of fiscal policy in the economy by swiftly implementing supplementary budgets in sectors requiring revitalization.” Yoon Jiho, Head of BNP Paribas Seoul branch, suggested, “Efforts should be intensified to enhance fiscal efficiency, such as restructuring expenditures in low-performing business areas.”

Policy Chief Cho remarked, “While this year’s growth trend is better than expected, we will remain vigilant as downside risks such as the ongoing Middle East conflict persist,” and added, “We will actively invest in key sectors to fundamentally expand growth potential, rather than relying on temporary rebounds.”

This content was produced with the assistance of AI translation services.