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's exports reached a record $709.7 billion in 2025, surpassing the $700 billion mark for the first time. The surge was driven by strong semiconductor demand, leading to the largest trade surplus since 2017 at $78 billion. Industry Minister Kim Jung-kwan highlighted the economy's resilience amid global challenges.

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South Korean companies' earnings rose 20 percent year-on-year in 2024, driven by increased semiconductor exports. Government data showed combined before-tax net profits reaching 181.9 trillion won, with the manufacturing sector leading the rebound. The year marked a transitional phase for artificial intelligence, boosting chip demand.

South Korea's consumer prices rose 2 percent year-on-year in January, marking the slowest pace in five months. The slowdown was partly due to stable petroleum product prices, as international crude oil prices fell, according to government data. However, prices for some agricultural and livestock products continued to surge sharply.

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South Korea's exports rose 8.2 percent year-on-year in the first 20 days of November, fueled by strong demand for semiconductors and automobiles. Outbound shipments reached $38.5 billion, up from $35.6 billion a year earlier, according to Korea Customs Service data. Imports grew 3.7 percent to $36.1 billion, yielding a $2.4 billion trade surplus.

 

 

 

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