Bank of Korea Governor Shin Hyun-song expressed optimism about the potential rebound of South Korea's economic growth rate due to increased investment in artificial intelligence (AI). The Bank of Korea plans to release new estimates for the potential growth rate by the end of the year.
During a comprehensive audit session with the National Assembly's Finance and Economy Committee on October 23, Governor Shin commented on the International Monetary Fund's (IMF) projections for South Korea's potential growth rate, stating, "I believe this is a very important turning point."
He noted, "Not only in Korea but also the long-term stagnation theory that has persisted since the 2010s is being shaken. I see that the potential growth rate of the global economy has increased."
The Bank of Korea is also set to announce new estimates for the potential growth rate within the year. In response to questions about the timing of the announcement, Governor Shin said, "While a specific date has not been set, we plan to release our estimated potential growth rate in the form of a working paper before the end of the year."
He identified improvements in total factor productivity as a key factor in raising the potential growth rate. Total factor productivity is an indicator that reflects technological innovation and production efficiency that cannot be explained solely by labor and capital inputs.
Governor Shin emphasized, "Total factor productivity is key. While the level of total factor productivity itself must rise, it is also important to continuously increase the growth rate. We must enhance it through innovation."
He agreed with the assessment that the South Korean economy has entered a new growth trajectory thanks to expanded AI investment. Governor Shin explained, "At this year's IMF meeting, there was considerable consensus that the rise in long-term interest rates is related not only to fiscal issues but also to improved investment returns."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.