Half of economists forecast 1% growth range for Korea

More than half of economic experts expect South Korea's economic growth to remain in the 1 percent range this year, according to a local survey. The poll, conducted by Southernpost Inc. for the Korea Enterprises Federation (KEF), showed 54 percent of 100 economics professors holding this view. The average forecast stands at 1.8 percent, below the government's 2 percent outlook and the IMF's 1.9 percent projection.

A survey revealed that South Korea's economy is likely to grow in the low single digits this year. In a poll commissioned by the Korea Enterprises Federation (KEF) and conducted by Southernpost Inc., 54 percent of 100 economics professors predicted growth in the 1 percent range for 2026. Another 36 percent foresaw a shift to 2 percent starting in 2027, fueled by recovering consumption and demand, while 6 percent anticipated below 1 percent.

The economy expanded by 1 percent last year, down from 2 percent the year before. The average forecast of 1.8 percent falls short of the government's 2 percent target and the International Monetary Fund's (IMF) 1.9 percent estimate. Respondents projected the won-dollar exchange rate to fluctuate between 1,403 won and 1,516 won this year.

Nearly 60 percent of economists said the outcome of U.S.-South Korea tariff negotiations would negatively affect exports to the United States and domestic corporate investment. On the expanding use of artificial intelligence (AI) in workplaces, 92 percent viewed it as a solution to labor shortages and a boost to productivity, especially in manufacturing.

Almost 90 percent urged the government to implement strong measures against the overseas leakage of semiconductors and other core technologies, including severe penalties for violations. The survey results were released on January 25, 2026.

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Illustration depicting South Korea's 1% GDP growth in 2025 driven by exports amid construction weakness and Q4 contraction.
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South Korea's economy grows 1 percent in 2025

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South Korea's gross domestic product grew 1 percent in 2025 from the previous year, according to Bank of Korea data, but the fourth quarter saw an unexpected 0.3 percent contraction. Strong exports drove the annual figure despite weakness in construction. This marks half the 2 percent expansion of 2024.

Major global investment banks have upgraded their forecasts for South Korea's 2026 economic growth. Citing an upcycle in the global semiconductor industry, the average outlook now stands at 2.1%. This is more optimistic than the Bank of Korea's 1.8% projection and the government's 2% forecast.

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An Asia-based economic surveillance organization has projected that South Korea's economy will expand by 1.9 percent next year, supported by growth momentum that began earlier this year. The assessment came in a report following its annual consultation with the South Korean government this month. Growth is expected to accelerate from 1 percent in 2025.

South Korea added 193,000 jobs in 2025, maintaining year-on-year employment growth at the 100,000 level for the second straight year despite ongoing losses in manufacturing and construction. Data from the Ministry of Data and Statistics showed the number of employed people rose 0.7 percent to 28.77 million from a year earlier. While youth employment remained sluggish, jobs for those aged 60 and older saw the largest increase.

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South Korea's exports expanded 23.5 percent year-on-year in the first 20 days of February, driven by strong semiconductor demand. Outbound shipments reached $43.5 billion, resulting in a trade surplus of $4.9 billion. The growth reflects a boom in chip exports fueled by artificial intelligence demand.

South Korea's exports expanded 14.9 percent year-on-year in the first 20 days of January, reaching $36.36 billion, fueled by strong semiconductor demand. Imports grew 4.2 percent to $36.98 billion, resulting in a $600 million trade deficit. Data from the Korea Customs Service underscores ongoing growth in key sectors.

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South Korea's exports grew 6.8 percent year-on-year to $43 billion in the first 20 days of December, driven by strong global demand for semiconductors. This marks an all-time high for the period, surpassing last year's record. While car and petroleum shipments declined, the trade surplus expanded to $3.8 billion.

 

 

 

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