(Yonhap)
South Korea’s economic growth forecast for this year has been revised up to 2.7 percent, driven by robust semiconductor exports, according to the Hyundai Research Institute on Sunday.
The institute said it raised its projection by 0.8 percentage point from its earlier estimate of 1.9 percent released in September last year. The new outlook also marks a 1.7 percentage point increase from last year’s 1.0 percent growth.
The upward revision stems largely from a continued boom in semiconductor exports. The institute noted that the global semiconductor upcycle is expected to persist, while higher oil prices are pushing up export unit prices, supporting overall export growth.
South Korea’s trade surplus is projected to more than double from $77.4 billion last year to $152.2 billion this year, reflecting stronger export performance.
Domestic demand, however, may remain subdued due to weakened consumer sentiment and inflationary pressure caused by elevated oil prices. Still, large-scale government fiscal spending is expected to partially offset these headwinds.
The institute also expects that a supplementary budget aimed at addressing external uncertainties will be swiftly implemented, helping cushion the economic slowdown.
Risks remain, however, as heightened geopolitical tensions and potential additional tariff measures stemming from political uncertainty in the United States could dampen the pace of recovery.
“The most pressing issue for South Korea’s economy is overcoming current external uncertainties,” the institute said, calling for flexible growth strategies to adapt to potential global paradigm shifts following the U.S.-Iran conflict.
It also recommended accelerating the execution of supplementary budgets to boost domestic demand, while diversifying export markets and strengthening supply chain stability.
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