Korean economy to reboound 1.8% next year, 2% year after, Bloomberg survey says

U.S. President Donald Trump, proper, shakes the hand of President Lee Jae Myung throughout a gathering within the Oval Workplace of the White Home in Washington on Aug. 25. [AP/YONHAP]

 
Korea’s financial system appears to be like set to start a gradual rebound subsequent yr, with a rising variety of forecasters placing 2026 progress within the excessive 1 p.c vary and that of 2027 round 2 p.c.
 
The projections of 41 Korean and abroad establishments for the expansion of Korea’s actual GDP in 2026 common 1.8 p.c, based on a Bloomberg tally. Eight predict progress of two p.c or increased, together with Goldman Sachs, which forecasts 2.2 p.c, and JPMorgan Chase, which forecasts 2.1 p.c. One other eight, together with Nomura, Allianz, Deutsche Financial institution and Commonplace & Poor’s, forecast 1.9 p.c.
 
 
A complete of 35 establishments meet or exceed the Financial institution of Korea (BOK)’s 1.6 p.c view for 2026, with some pointing to decreased uncertainty after a U.S.-Korea tariff settlement and expansionary fiscal coverage.
 
Outlooks enhance additional for 2027. Nineteen establishments, together with UBS at 2.9 p.c and Société Générale at 2.1 p.c, averaged 2.0 p.c. UBS cited stronger semiconductor exports on the again of heavier funding in AI together with a restoration in international demand and home spending.
 
Indicators of an financial rebound are already rising within the second half of this yr.
 
The BOK estimated quarter-on-quarter progress of 0.6 p.c within the second quarter and 1.1 p.c within the third, then a slowdown to 0.2 p.c within the fourth as tariff results kick in. The financial institution projected a present account surplus of $110 billion this yr, which might mark the biggest on report if realized.
 
“We raised our export outlook considerably as semiconductor shipments grew greater than anticipated,” mentioned Kim Woong, a BOK deputy governor.


Analysts see the primary half of this yr because the cyclic low and anticipate a gradual rebound.
 
“If the U.S. funding cycle holds regardless of tariff headwinds, Korea’s key export sectors may ship better-than-feared outcomes,” Kiwoom Securities mentioned.
 
However medium to long-term dangers stay.
 
“Contemplating the current tempo of capital accumulation and the outlook for the longer term working-age inhabitants, Korea’s potential progress price will fall to about 1.6 p.c between 2026 and 2030 and 1 p.c between 2031 and 2035,” Hyundai Analysis Institute mentioned. “Korea must strengthen competitiveness by elevating productiveness and to safe future core progress engines. Making a business-friendly funding setting and increasing the labor drive additionally stay key duties.”

This text was initially written in Korean and translated by a bilingual reporter with the assistance of generative AI instruments. It was then edited by a local English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY PARK YU-MI [[email protected]]