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

Published: 31 Aug. 2025, 18:52 Updated: 01 Sep. 2025, 09:18

U.S. President Donald Trump, right, shakes the hand of President Lee Jae Myung during a meeting in the Oval Office of the White House in Washington on Aug. 25. [AP/YONHAP]

Korea’s economy looks set to begin a slow rebound next year, with a growing number of forecasters putting 2026 growth in the high 1 percent range and that of 2027 around 2 percent.

The projections of 41 Korean and overseas institutions for the growth of Korea's real GDP in 2026 average 1.8 percent, according to a Bloomberg tally. Eight predict growth of 2 percent or higher, including Goldman Sachs, which forecasts 2.2 percent, and JPMorgan Chase, which forecasts 2.1 percent. Another eight, including Nomura, Allianz, Deutsche Bank and Standard & Poor's, forecast 1.9 percent.

A total of 35 institutions meet or exceed the Bank of Korea (BOK)’s 1.6 percent view for 2026, with some pointing to reduced uncertainty after a U.S.-Korea tariff agreement and expansionary fiscal policy.

Outlooks improve further for 2027. Nineteen institutions, including UBS at 2.9 percent and Société Générale at 2.1 percent, averaged 2.0 percent. UBS cited stronger semiconductor exports on the back of heavier investment in AI along with a recovery in global demand and domestic spending.

Signs of an economic rebound are already emerging in the second half of this year.

The BOK estimated quarter-on-quarter growth of 0.6 percent in the second quarter and 1.1 percent in the third, then a slowdown to 0.2 percent in the fourth as tariff effects kick in. The bank projected a current account surplus of $110 billion this year, which would mark the largest on record if realized.

“We raised our export outlook significantly as semiconductor shipments grew more than expected,” said Kim Woong, a BOK deputy governor.

Analysts see the first half of this year as the cyclic low and expect a gradual rebound.

“If the U.S. investment cycle holds despite tariff headwinds, Korea’s key export sectors could deliver better-than-feared results,” Kiwoom Securities said.

But medium to long-term risks remain.

“Considering the recent pace of capital accumulation and the outlook for the future working-age population, Korea’s potential growth rate will fall to about 1.6 percent between 2026 and 2030 and 1 percent between 2031 and 2035,” Hyundai Research Institute said. “Korea needs to strengthen competitiveness by raising productivity and to secure future core growth engines. Creating a business-friendly investment environment and expanding the labor force also remain key tasks.”

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