OECD Sees South Korea’s 2026 Nominal Growth at 10.4%

The Organization for Economic Cooperation and Development projects South Korea’s nominal economic growth will exceed 10% this year, driven by a semiconductor supercycle that is expected to lift both real growth and export prices.

In its Economic Outlook report released on June 3, the OECD raised its forecast for South Korea’s real economic growth this year to 2.6% from 1.7%. It also sharply lifted its GDP deflator outlook to 7.6% from 1.9%. The GDP deflator is a broad price indicator that combines consumer prices with export and import prices. A surge in memory chip prices drove the measure higher. As a result, the OECD forecast nominal growth of 10.4%. South Korea’s nominal growth rate would exceed 10% for the first time in 24 years, since 2002, when it reached 11.0%.

President Lee Jae-myung said at a Cabinet meeting on May 26 that projections showed this year’s nominal growth could approach 10%.

Kim Ik-hwan and Chung Young-hyo, Korea Economic Daily reporters, lovepen@hankyung.com