BOK: "IT's Growing Weight Is an Opportunity to Elevate Economic Growth to a Higher Level"

The Bank of Korea (BOK) projected that the semiconductor market expansion will continue at least through the first half of next year, significantly increasing the share of information technology (IT) manufacturing, including semiconductors, in the overall economy.

Lee Dong-lyeol, head of the BOK's Economic Research Department, stated during an economic outlook briefing on the afternoon of the 27th, "The economic structure is being reorganized in a direction where the share of IT manufacturing itself in the entire economy is growing."

Earlier, the BOK revised its real gross domestic product (GDP) growth forecast for this year from 2.6% to 3.3%, an upward adjustment of 0.7 percentage points (p).

It also substantially raised next year's growth forecast from 2.1% to 2.9%.

Regarding the background behind the projection that growth will remain high next year following this year, Director Lee explained, "We anticipated that the semiconductor cycle expansion will continue and its spillover effects will spread significantly from the current focus on export investment to the overall economy next year."

He added, "In particular, the share of IT manufacturing, such as semiconductors, relative to nominal GDP is expected to expand sharply next year," and noted, "Accordingly, the growth contribution of the IT sector is expected to be even greater next year than this year."

Lee evaluated, "This is an opportunity for our economic growth rate to step up to a higher level."

While this year's economy has grown centering on exports rather than domestic demand, he projected that next year the contribution of domestic demand to growth will expand to a level comparable to that of exports.

According to a report by the BOK's Economic Research Department, the net growth contribution of domestic demand is projected to grow from 0.9 percentage points (p) in the second half of this year to 1.3 p in the first half of next year, and 1.8 p in the second half.

Regarding the duration of the semiconductor cycle expansion, he said, "Our current forecasting horizon extends through next year, and within that range, we reflected in this outlook that the expansion trend driven by supply shortages will continue at least through the first half of next year."

He continued, "When the peak will be reached will depend on how long artificial intelligence (AI) demand sustains and how fast semiconductor companies expand their supply."

(Photo: Provided by Photo Joint Press Corps, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.