OECD raises South Korea 2026 growth forecast to 3.7%, largest G20 upgrade
On September 23, the OECD sharply raised its 2026 economic growth forecast for South Korea to 3.7% from 2.6% in June, the largest upward revision among G20 nations. The upgrade is driven by strong semiconductor exports and industrial production, with annual exports expected to approach $1 trillion. However, the OECD also warned of structural weaknesses, including declining potential growth and rising debt vulnerabilities.
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OECD sharply raises South Korea 2026 growth forecast to 3.7%, highest among G20
On September 23, the OECD released a mid-year economic outlook report, sharply raising its 2026 growth forecast for South Korea to 3.7% from 2.6% in June, the largest upward revision among G20 nations. The forecast has been raised by a cumulative 2 percentage points since March, when it stood at 1.7%. The OECD attributed the upgrade to strong industrial production and export growth, particularly in semiconductors, with South Korea's annual exports expected to approach $1 trillion. Among G20 advanced economies, South Korea's expected growth rate of 3.7% far exceeds the US (2.2%), UK (1.1%), and Japan (0.8%). If realized, South Korea's growth would surpass the US for the first time since 2022. The Bank of Korea and the Korea Development Institute forecast 3.3% and 3.2% respectively, while JPMorgan is more optimistic at 3.8%. The OECD expects growth to slow to 2.6% in 2027.
Read sourceOECD sharply raises South Korea 2026 growth forecast to 3.7%, but warns of structural weakness
The OECD has sharply raised its 2026 economic growth forecast for South Korea to 3.7%, the largest upgrade among G20 nations, driven by strong semiconductor exports. The forecast was upgraded from 2.6% in June and from 1.7% in March, a cumulative 2 percentage point increase. South Korea's expected growth rate now surpasses that of the US (2.2%), UK (1.1%), and Japan (0.8%). However, the article highlights underlying structural problems. Bank of Korea data shows one in five externally audited firms had operating profits insufficient to cover interest expenses for three consecutive years. The delinquency rate for vulnerable borrowers rose above 10% by June. The OECD estimates South Korea's potential growth rate will fall from 1.85% last year to 1.66% this year and 1.52% next year, with a projected low of 1.46% in Q4 2027, the first time below 1.5%. The article notes that growth benefits are concentrated in a few sectors, and external risks such as global monetary tightening, geopolitical tensions, and US tariffs could derail the current expansion. South Korea's Deputy Prime Minister and Finance Minister Lee Joon-il has made raising the potential growth rate and reducing polarization his top priorities.
Read sourceOECD sharply raises South Korea's 2026 growth forecast to 3.7%, but warns of structural weaknesses
On September 23, the OECD released an interim economic outlook, raising South Korea's 2026 growth forecast to 3.7% from 2.6% in June, the largest upward revision among G20 nations. The OECD cited strong industrial production and export growth, particularly in semiconductors, as key drivers, with 2025 exports expected to approach $1 trillion. South Korea's 2025 growth is forecast to be the highest among G20 developed economies, surpassing the US (2.2%), UK (1.1%), and Japan (0.8%). However, the report highlights structural problems beneath the surface: one in five Korean firms had operating profits insufficient to cover interest expenses for three consecutive years, and overdue loans among vulnerable borrowers exceeded 10% as of June. More concerning, South Korea's potential growth rate is projected to decline from 1.85% in 2024 to 1.52% by 2026, with a forecast of 1.46% in Q4 2027—the first time below 1.5% since OECD began tracking. The article notes that external risks such as global monetary tightening, geopolitical tensions, and US tariffs could derail the above-3% growth. South Korea's Deputy Prime Minister Lee Joon-il has prioritized raising potential growth and reducing polarization.
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OECD Raises 2026 South Korea Growth Forecast to 3.7% From Previous 2.6%
The Organisation for Economic Co-operation and Development (OECD) has revised its economic growth forecast for South Korea in 2026 upward to 3.7%, according to a report from tradealpha. This represents a significant increase from the previous forecast of 2.6%. The revision indicates improved expectations for the South Korean economy in the medium term, though the source does not provide specific reasons for the upgrade. The forecast is attributed to the OECD and reflects its latest assessment of South Korea's economic trajectory.
Read sourceOECD Raises 2026 South Korea Growth Forecast to 3.7% from 2.6%
The Organisation for Economic Co-operation and Development (OECD) has revised its economic growth forecast for South Korea in 2026 upward to 3.7%, from a previous estimate of 2.6%. This adjustment, reported by financial data provider Jin10, indicates a significantly more optimistic outlook for the South Korean economy in the medium term. The forecast change reflects the OECD's updated assessment of South Korea's economic trajectory, though the specific reasons for the upgrade were not detailed in the brief report. The new projection places South Korea's expected growth rate well above the earlier forecast, suggesting potential improvements in domestic demand, exports, or other economic fundamentals as anticipated by the international organization.