Ministry of Planning and Budget says it will actively invest in key sectors, with growth2.5~3.0% forecast

The Ministry of Planning and Budget20day, held a meeting of macroeconomic experts. Cho Yong-beom, head of the Ministry's Budget Office, chaired the meeting. Officials from the government and research institutions, along with investment banking representatives, attended.

Domestic and international institutions attended the meeting, including the Korea Development Institute (KDI), Samsung Global Research, Hyundai Research Institute, JPMorgan, Citibank, and BNP Paribas. The Ministry of Planning and Budget said it would actively invest in key sectors. It explained that it would focus its policy capabilities on overcoming structural challenges.

The experts in attendance forecast South Korea's economic growth rate this year at2.5~3.0%. They noted that strong semiconductor exports and the impact of the government's supplementary budget had driven the upper end of the growth range. They said they expected the expansion phase to continue next year.

The briefing materials stated that 1the quarterly growth rate was 1.7%, exceeding the initial estimate of 0.9%. This figure shows that growth was stronger than expected. However, the materials noted that short-term shock factors remain.

Participants identified inflationary pressure from a prolonged war in the Middle East, supply chain instability, and a widening industrial gap centered on semiconductors as key risks. They also raised the need to assess whether the semiconductor boom can be sustained. Discussion continued on the role of fiscal policy and the policy mix.

JPMorgan assessed that the effects of the government’s price-stabilization policies were mixed with upward pressure from rising crude oil prices. It said the inflationary impact of the energy shock was uncertain but could be mitigated through policy. The briefing was organized to review the direction of future fiscal investment ahead of the preparation of next year’s budget proposal.