Semiconductor Boom Drives 3% Growth Forecast, Though Employment and Inflation Remain Challenges

[Anchor]

The government has projected that the South Korean economy will grow by 3% this year, fueled by a semiconductor boom. This is a 1 percentage point increase from the 2% forecast made six months ago. Despite this surprising growth, the job market is expected to become even more difficult.

Reporter Jung Jun-ho has the story.

[Reporter]

In announcing its economic growth strategy for the second half of the year, the government has raised its forecast for real GDP growth to 3%.

This is 1 percentage point higher than the 2% forecast from January, and it is a figure that exceeds the projections of the Bank of Korea, the IMF, and the OECD.

The primary reason is the unprecedented boom in semiconductor exports, which are central to global AI infrastructure.

The nominal GDP growth rate, which reflects inflation, is projected to reach 12.3%, the highest in 30 years, due to the sharp rise in semiconductor export prices.

The current account surplus is expected to reach a record high of $290 billion.

The government explained that while the war in the Middle East posed a negative factor, the impact was significantly mitigated by the 26 trillion won supplementary budget, adding that the growth forecast also reflects the government's policy commitment.

[President Lee Jae-myung: I ask for your collective efforts so that this year will be remembered as the inaugural year for South Korea to leap forward as an irreplaceable nation, with a potential growth rate of 3%, ranking among the world's top four in trade, and achieving a per capita income of $50,000.]

To achieve this, the government plans to rapidly push forward with three major mega-projects—semiconductors, AI data centers, and physical AI—to create a super-gap in the global market.

Furthermore, the government plans to use tax revenue generated from the semiconductor sector for a Future Response Fund, investing heavily in youth, regional development, and education to enhance growth potential.

It also intends to train 200,000 young professionals for high-tech industries and strengthen regional-led growth by selecting regional growth engines in the third quarter and providing investment incentives.

However, despite the high growth rate, the outlook for jobs remains bleak.

The number of employed people this year is expected to increase by only 150,000, which is 10,000 fewer than the forecast made in January.

This is because growth is concentrated solely in the semiconductor industry, which has a low job creation effect.

[Heo Jun-young, Professor of Economics at Sogang University: Jobs are not being created in sectors like manufacturing, and while the semiconductor industry is thriving alone and pulling up the economic growth rate itself...]

In addition, the inflation forecast for this year has been raised from 2.1% to 2.6% due to the aftermath of the war. Experts point out that responding to the impact of high inflation, high interest rates, and a high exchange rate on the public's livelihood will be a major challenge for the second half of the year.

(Video Editing: Kim Jun-hee)
※ Please note: This article was translated by AI and may contain errors.