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.
South Korea's economic growth outlook for 2026 is turning more positive. According to a report by the Korea Center for International Finance (KCIF), the average forecast from eight major global investment banks stood at 2.1% as of end-January, up 0.1 percentage point from a month earlier. This reflects optimism for Asia's fourth-largest economy.
Citi raised its forecast to 2.4% from 2.2%, expecting semiconductor exports to more than double to 54% in 2026 from 22% last year. UBS increased its projection to 2.2% from 2%. Nomura maintained 2.3%, while Barclays (2.1%), Bank of America (1.9%), JP Morgan (2%), and HSBC (1.8%) kept theirs unchanged. Goldman Sachs, however, lowered its outlook to 1.8% from 1.9%.
Expectations are high that the global semiconductor cycle will remain stronger and more resilient than anticipated. Yet, some institutions warn of headwinds for non-tech industries amid risks from the United States' aggressive tariff policies. These forecasts hinge on the performance of Korean firms like Samsung Electronics and SK hynix in semiconductors.
