South Korea’s Economy Likely to Grow Faster in 2026
The economy is expected to have grown 1.0% in 2025, slightly stronger than an earlier projection of 0.9%
- South Korea’s economy is projected to grow by 2.0% in 2026, an increase from the previous forecast of 1.8%.
- Domestic demand is anticipated to drive economic recovery, fueled by improved consumer sentiment and policy support.
- Inflation is forecast to average 2.1% in 2026, slightly higher than the prior estimate of 2.0%.
South Korea’s government expects the economy to grow faster than previously forecast 2026, supported by a recovery in domestic demand.
Gross domestic product in Asia’s fourth-largest economy is projected to expand 2.0% in 2026, up from the government’s August forecast of 1.8%, the Ministry of Economy and Finance said Friday in its semiannual outlook.
The economy is expected to have grown 1.0% in 2025, slightly stronger than an earlier projection of 0.9%, the ministry said.
Domestic demand is expected to be the main driver of the recovery, as consumption picks up on improving consumer sentiment and policy support.
Contributions from exports could weaken in 2026 amid higher U.S. tariffs and trade barriers in other markets, despite solid demand for South Korean semiconductors, the ministry said.
Inflation is expected to edge higher, with lower oil prices likely to offset upward price pressures stemming from stronger consumer spending.
For 2026, inflation is forecast to average 2.1%, compared with the government’s previous estimate of 2.0%. Inflation is estimated to have averaged 2.1% in 2025, the ministry said.