Bank of Korea Governor Shin Hyun-song indicated on July 16 that the timeline for the GDP gap to turn positive could be moved up. He noted that improvements in trade conditions due to rising semiconductor prices are driving growth, and future monetary policy decisions will closely consider the sustainability of these prices.
During a press conference following the Monetary Policy Committee meeting, Shin responded to a question about the timing of the GDP gap's positive transition, saying, "In the last press conference, I mentioned that I expected a positive transition around early next year, but given recent developments, that timeline may be moved up."
However, he added, "The GDP gap must be calculated through models, and we have not yet completed the analysis. I will provide an explanation once the results are available." The GDP gap represents the difference between actual economic growth and potential growth.
Shin cited the rise in semiconductor prices as a key factor behind this assessment. He explained, "While GDP grew by 3.8%, gross domestic income (GDI) increased by 13.1%. This difference is primarily due to the impact of rising semiconductor prices rather than export volumes."
He emphasized the importance of how long this trend will last, stating, "As the artificial intelligence (AI) industry enters a new phase, semiconductors are becoming a core element in building an AI-based economy, rather than just a simple export item."
Shin stressed the need to pay close attention to semiconductor prices, noting, "We must carefully monitor semiconductor prices, as they influence trade conditions and GDI, providing important insights for the long-term growth of the Korean economy and monetary policy decisions."
However, he cautioned that some semiconductor price indices observed in the market differ from the products that domestic companies actually trade, adding, "Since a significant portion of semiconductors are traded through long-term contracts, it is necessary to comprehensively examine price trends."
* This article has been translated by AI.
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