South Korea raises economic growth forecast to 3% on export surge

South Korea's Finance Ministry has significantly boosted its economic growth forecast to 3% for the year, a substantial increase from its previous projection of 2%. This optimistic outlook is underpinned by strong export performance, particularly driven by a semiconductor supercycle, and a reduction in uncertainties surrounding the Middle East.

Finance Minister Koo Yun-cheol expressed strong confidence in the nation's economic resilience, highlighting that both real-economy and macroeconomic indicators, including growth, exports, inflation, and consumer and business sentiment, are showing a consistent upward trend. Data indicates that Asia's fourth-largest economy expanded by 3.8% in the first six months of the year compared to the previous year. Exports, a key economic driver, achieved a record high of US$102.2 billion in June, fueled by robust global demand for memory chips.

In response to recent stock market volatility, Minister Koo stated that the government is actively working to stabilize the market and enhance its attractiveness to investors. Measures are being implemented to improve the structural health of the capital market and foster new industries. Specifically, the government has introduced restrictions on transactions involving single-stock leveraged exchange-traded funds (ETFs), such as those linked to Samsung Electronics Co. and SK hynix Inc., which were introduced in May and are considered a factor in recent market fluctuations.