Global credit rating agency Standard & Poor's (S&P) has raised its economic growth forecast for South Korea this year from 2.9% to 3.5%, an increase of 0.6 percentage points. This adjustment is attributed to strong semiconductor exports driven by a global AI boom.
In a report released on September 22, titled 'Asia-Pacific Economic Outlook for Q4 2026: Export and Domestic Demand Growth Outlook,' S&P projected the growth rate for the Asia-Pacific region to rise by 0.2 percentage points to 4.6% compared to its previous forecast in June. The growth forecast for next year remains unchanged at 4.4%.
Among countries, Taiwan's growth forecast was the highest at 10.9%, up 2.7 percentage points from the previous quarter's estimate of 8.2%. Vietnam and India followed with growth forecasts of 8% and 7%, respectively, reflecting increases of 1.3 and 0.4 percentage points. In contrast, China's growth forecast was lowered by 0.1 percentage points to 4.3%, while Japan's forecast was raised by 0.2 percentage points to 0.8%.
For South Korea, the growth forecast has been adjusted upward for two consecutive quarters, moving from 1.9% in Q2 to 2.9% in Q3, and now to 3.5% in Q4. Additionally, S&P has also raised its growth forecasts for next year and the year after to 2.7% and 2.4%, respectively, an increase of 0.5 and 0.3 percentage points.
S&P explained that the increase in growth forecasts is due to the expansion of semiconductor and related product exports from countries like Taiwan and South Korea, which are outweighing the negative impact of high oil prices resulting from conflicts in the Middle East. The strong consumer spending trends in India, Indonesia, Australia, Taiwan, and Malaysia, along with robust investment growth in Australia, India, Indonesia, Singapore, Taiwan, and Thailand, have also contributed to the upward revision.
However, S&P identified potential risks to the Asia-Pacific economic outlook, particularly related to AI spending. Since most AI investments are currently being made by U.S. hyperscalers, any changes in their investment plans could impact the economic growth rates of countries like South Korea and Taiwan, which have significant semiconductor export sectors.
Meanwhile, amid the global AI boom, South Korea's semiconductor exports are reaching record highs, prompting major institutions to revise their growth forecasts upward. The Asian Development Bank (ADB) announced on September 23 that it has raised its growth forecast for South Korea from 2.6% in July to 3.2% for this year.
* This article has been translated by AI.
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