[Edaily Reporter Jang Young-eun ] Major global investment banks (IBs) are unanimously raising their economic growth forecasts for South Korea for this year and next. As the semiconductor export boom continues and the country’s trade surplus hits a record high, the outlook in global financial markets is becoming increasingly optimistic.

According to the International Finance Center on the 5th, the average forecast for South Korea’s real gross domestic product (GDP) growth this year—based on data from eight major foreign investment banks as of the end of October—stood at 3.7%, a 0.2 percentage point upward revision from a month ago. The growth forecast for next year also rose by 0.1 percentage point from the previous month to an average of 2.9%.

This year’s growth forecast matches the projection released by the Organization for Economic Cooperation and Development (OECD) last September. Next year’s growth forecast is higher than the OECD’s projection (2.6%). This indicates that following this year’s high growth rate in the high 3% range, the economy is expected to maintain a growth rate close to 3% next year as well. Last year’s growth rate was 1.1%.

The Bank of Korea had previously projected growth rates of 3.3% and 2.9% for this year and next year, respectively, in August, but signaled an upward revision in its updated economic outlook released this month. Bank of Korea Governor Shin Hyun-song stated at a press briefing on monetary policy direction on the 22nd of last month, “The growth rate projections for this year and next year are expected to significantly exceed the previous forecasts.”

Not only growth rates but also the current account balance forecast—an indicator of external soundness—has risen sharply. The average forecast by eight investment banks for South Korea’s current account surplus as a percentage of GDP this year stands at 19.4%, an upward revision of 1.9 percentage points from a month ago. This figure is nearly three times the surplus ratio recorded last year (6.6%).

According to the Bank of Korea’s preliminary balance of payments figures for September released today, the current account surplus in September reached $61.46 billion, surpassing the $60 billion mark for the first time in history. This figure broke the previous record set in June ($49.73 billion) in just three months. This figure is equivalent to half a year’s worth of the current account surplus recorded last year ($123.1 billion), which was the highest on record due to a surge in semiconductor exports. Considering that the average annual current account surplus from 2020 to 2024—before the start of the semiconductor supercycle—was approximately $63.2 billion, this means the country generated a surplus equivalent to one year’s worth in just the past month.

Rising semiconductor demand and soaring prices driven by expanded investment in artificial intelligence (AI) are fueling growth in information technology (IT) exports, resulting in an unprecedented current account surplus. Kim Young-hwan, Director General of the Bank of Korea’s Economic Statistics Division 1, stated at a briefing on the balance of payments for September that day: “While exports are expected to decline and imports to rise in October compared to September—resulting in a decrease in the trade balance—we project the current account surplus will reach the second-highest level on record,” he said. He added that while the current account surplus is likely to widen again in November and December due to seasonal factors boosting exports toward year-end, increased dividends paid to foreign investors as part of shareholder returns could act as a downward pressure.

Meanwhile, the range of economic growth forecasts for next year presented by investment banks varies widely. The gap, ranging from 2.2% projected by Nomura to 3.6% by JPMorgan, reached as high as 1.4 percentage points. This year’s growth forecasts range from a low of 3.4% (HSBC) to a high of 3.9% (J.P. Morgan). This is interpreted as reflecting divergent market analyses regarding whether the current semiconductor cycle will remain robust through next year and the extent to which strong semiconductor exports will spill over into the broader real economy—including improvements in employment, investment, and private consumption.