OECD predicts South Korea’s potential growth to hit record low by 2027
The Organization for Economic Co-operation and Development (OECD) has projected that South Korea’s potential growth rate will drop to a historic low of 1.52 percent by the final quarter of 2027, continuing a decline that has persisted for over a decade, Qazinform News Agency cites Yonhap.
According to its latest data, South Korea’s potential growth rate is expected to fall significantly from 1.92 percent last year to an estimated 1.71 percent this year - and decline further to 1.57 percent next year, before reaching 1.52 percent in the October-December period.
The potential growth rate measures how fast an economy can expand without causing inflation, assuming full use of labor, capital, and other resources.
The OECD’s estimates show that South Korea’s growth potential has been steadily weakening since 2012, when it stood at 3.63 percent. If this trajectory continues, the country will experience 15 straight years of declining growth potential.
The figures also reveal a growing gap with the United States. Since 2023, South Korea has lagged behind the U.S. in potential growth, with the difference widening from just 0.03 percentage points in 2023 to a projected 0.38 percentage points next year.
Earlier, Qazinform reported South Korea’s Q1 GDP surges 1.7 percent, doubling forecasts on semiconductor demand.
