Key facts
- South Korea aims to achieve a potential growth rate of 3 percent.
- The government has revised its economic growth projection for the year upwards to 3 percent.
- The country also targets becoming a top four global exporter and reaching $50,000 in per capita GNI.
- Finance Minister Koo Yun-cheol highlighted industrial transformation, including next-generation power semiconductors and physical AI, as key drivers.
- The OECD estimates South Korea's potential growth rate at 1.85% for 2025 and 1.66% for the current year.
South Korea's finance minister, Koo Yun-cheol, has stated that the nation's goal of achieving a 3 percent potential growth rate is attainable, though challenging, driven by industrial transformation and the current semiconductor supercycle. This statement follows the government's unveiling of its second-half economic policy plan, which includes a revised economic growth target of 3 percent for the year, a 1 percentage point increase from previous projections. The plan also aims for South Korea to become one of the world's top four exporters and to raise its gross national income per capita to $50,000.
Minister Koo noted that the '3-4-5 economic target' is not solely dependent on the semiconductor cycle, pointing to growth in related industries like next-generation power semiconductors and physical artificial intelligence. While acknowledging South Korea's current fifth-place ranking in exports, he expressed confidence in achieving the fourth-largest exporter goal. He also mentioned that the country's GDP per capita is expected to reach approximately $40,000 this year.
However, Koo cautioned that the 3 percent potential growth target might be difficult to achieve, emphasizing the government's policy commitment to pursue it through industrial transformation beyond the current concentration on memory chips. The potential growth rate signifies the maximum sustainable GDP increase without causing inflation, and the OECD has projected South Korea's potential growth rate at 1.85 percent for 2025 and 1.66 percent for the current year.