President Lee: South Korea's Economic Potential Set for Dramatic Rebound

President Lee Jae-myung stated on October 20 that South Korea's potential growth rate is expected to rise for two consecutive years, calling it "a very positive signal that the fundamental strength of the Korean economy is reviving."

In a post on X (formerly Twitter) titled "A Dramatic Reversal of the Fundamental Strength of the Korean Economy, the First in Over 40 Years," President Lee expressed his delight at the news.

According to major media outlets, the International Monetary Fund (IMF) forecasts that South Korea's potential growth rate will rebound for two consecutive years, which has not occurred since the "three lows boom" period of low oil prices, low interest rates, and a weak dollar in 1986-1987.

He explained, "Potential growth rate is the maximum growth rate a country can achieve by fully utilizing its labor, capital, and productivity without stimulating inflation. In simpler terms, it is an indicator of a country's economic fundamental strength."

President Lee emphasized the need to build on this improved fundamental strength to invigorate the economy and ensure that the benefits of growth are shared equitably among all citizens.

He also outlined the government's future policy direction, stating, "The government will focus its efforts on the success of the 'three mega-projects' for leapfrogging into a super-gap industrial powerhouse, the 'seven SEED projects,' and the 'three core social policies' of housing supply, job stability, and inclusive finance, so that the warmth of growth can be felt by the people."

He added, "I will do my utmost to improve the lives of our citizens."

Based on the IMF's October World Economic Outlook (WEO), South Korea's potential growth rate is projected to rise from 1.94% last year to 2.14% this year and 2.20% next year. This year's increase is 0.20 percentage points, while next year's is 0.06 percentage points.

This marks the first time since 1986 and 1987 that the potential growth rate has risen for two consecutive years. The projected potential growth rate of 2.14% for this year is the highest level since 2021.