Korea's growth could reach 3.6% this year: finance chief

by Kim Yeon-jae Posted : October 19, 2026, 13:32Updated : October 19, 2026, 13:32
Deputy Prime Minister and Finance Minister Lee Hyung-il answers questions from reporters during a press briefing at the Queen Sirikit National Convention Center in Bangkok on Oct 16 2026 while attending the IMF-World Bank Annual Meetings and meetings of G20 and G7 finance ministers Ministry of Finance and Economy
Deputy Prime Minister and Finance Minister Lee Hyung-il answers questions from reporters during a press briefing at the Queen Sirikit National Convention Center in Bangkok on Oct. 16, 2026, while attending the IMF-World Bank Annual Meetings and meetings of G20 and G7 finance ministers. Ministry of Finance and Economy.
SEOUL, October 19 (AJP) — South Korea's economy could grow around 3.5 percent, beating earlier government estimate of around 3 percent and helping to bolster growth potential, said finance minister Lee Hyung-il.

"I would say 3.4, 3.5, or 3.6 percent," he told reporters on the sidelines of the meetings of Group of 20 and Group of Seven finance ministers and central bank governors and annual conferences of IMF and World Bank in Bangkok on Oct. 16.

The Organization for Economic Co-operation and Development recently upgraded Korea's growth estimate to 3.7 percent.

He said exports and facility investment staying strong into the third quarter could extend to next year as chip supply remains below demand. 

The economy expanded 1.8 percent from the previous quarter in the first quarter and another 0.6 percent in the second. Second-quarter gross domestic product was 3.7 percent higher than a year earlier.

The BOK in August raised its 2026 growth forecast to 3.3 percent, pointing to strong semiconductor exports and investment, while warning that the outlook remained sensitive to the chip cycle and geopolitical developments.
 
Construction work is underway at SK hynixs Yongin Semiconductor Cluster in Yongin Gyeonggi Province on July 14 2026 Aju Business Daily Yoo Na-hyun
Construction work is underway at SK hynix's Yongin Semiconductor Cluster in Yongin, Gyeonggi Province, on July 14, 2026. Aju Business Daily Yoo Na-hyun
The OECD was more bullish in its September outlook, projecting 3.7 percent growth this year before a slowdown to 2.6 percent in 2027.

Lee also said the government is considering overhauling the way it publishes economic forecasts as rapidly changing conditions make twice-yearly projections less useful.

Under the plan, the government would issue a baseline outlook around year-end and update it twice during the following year, rather than publishing one annual outlook followed by a single midyear revision.

The change could also reduce the need for the broad second-half economic policy package traditionally released around June or July, with more targeted measures introduced alongside forecast revisions when necessary.

Lee also said Korea may be nearing a turning point in the long decline in its potential growth rate, pointing to strong capital spending and continued investment to meet semiconductor demand.

He did not provide a specific estimate for potential growth, but said sustained investment could eventually raise productivity as new production capacity comes on stream.

The next major test will come on Oct. 27, when the BOK is scheduled to release its advance estimate of third-quarter gross domestic product. A strong reading would add support to Lee's view that annual growth could reach the mid-3 percent range.