Jan 15, 2026Research Department &Office of Economic Modeling and Policy Analysis
Recent Economic Developments
Summary
▣Korea's economic growthis expected toremainin line with the November 2025outlook, as therobustsemiconductorcycleandtheconsumption recovery continue.
￭Major uncertainties on the growth path are related to factors such as thesemiconductor cycle, the global trade environment, andgrowth trends in majoreconomies.
▣CPI inflationthis yearis projectedto remain stable in line with thepreviousoutlook,as upside factors such astheelevatedexchange rate are offset by downside factorsincluding weakglobaloil prices and the government's price stabilization measures.
￭Looking ahead, the inflation trajectory will likely be influenced bymovements intheexchange rate and oil prices, aswell as domestic and global economic developments.
Recent Economic DevelopmentsJan 2026
Ⅰ.Global Economic Conditions...............................1
Ⅱ.Developments in Korea’s Economy..................2
Key Economic Indicators
▶Korea's economy is projected to follow a growth path broadly in line with theprevious outlook, as the robust semiconductor cycle and the consumptionrecovery continue, while non-IT exports and investment are expected toremainsubdued due to factors such as U.S. tariffs.▶CPI inflation is projected to remain in line with the previous outlook, as upsidefactors such as the elevated exchange rate are offset by downside factors includingweak global oil prices and the government's price stabilization measures.▶The forecast path is subject to considerable uncertainty regarding factors suchas the semiconductor cycle, the global trade environment, and movements intheexchange rate and oil prices.
Ⅰ.Global Economic Conditions
▢The global economy is expected to grow at around 3%thisyear, broadly in linewith thepreviousoutlook,while key risks lie in uncertainties surroundingmajor economies' tradepolicies and the trajectory of the AI cycle.
▪The United States economy is projected to grow in the low-2% range,supported by expanded AI investment and policy support, despite the impactof tariffs and employment slowdown.
▪Theeuro areais expected to continue its moderate growth, supported bymonetary accommodation to dateand fiscal expansion in major economies.
▪InChina, growth is projected to slow to the mid-4% range due to moderatingexport growth andsluggish recovery of domestic demand.
Ⅱ.Developments in Korea’s Economy
▢Korea's economy is projected to follow a growth path broadly in line with theprevious outlook of 1.8% in 2026, as the robust semiconductor cycle and theconsumption recovery continue, while non-ITexports and investment areexpected to remain subdued due to factors such as U.S. tariffs.
In2025,althoughthethird-quartergrowthrate was revised up to 1.3%fromtheadvance estimate of 1.2%,thefourth-quartergrowthrate is expected to fall belowthepreviousprojection of 0.2% due to weak investment, resulting in annual growthbroadly in line with the November outlook of 1.0%.
▪In2026, growth is expected to strengthen, led by domestic demand, supportedby continued consumption recovery and easing weakness in constructioninvestment.Regarding exports, semiconductors are expected to sustain theirrobust trend, while non-IT items are projected to remain weak under theimpact of U.S. tariffs.
▪In2027, the recovery in domestic demand is expected to continue,andexportgrowth is projected to accelerate on the back of improving global economicconditions.
Source: Korea Customs Service.
▢CPI inflation this year is projected to remain in line with thepreviousoutlookof 2.1% for headline and 2.0% for core inflation, as weakglobaloil prices andthe government's price stabilization measures offset the impact of theelevatedexchange rate.
In2025,CPI inflation*was2.1% and core inflationwas1.9%, in line with theNovember outlook.
*CPI inflation in December slowed to 2.3% from 2.4% in November, as agriculturalproduct prices moderated despite continuedrisesin petroleum product prices.
▪Going forward, CPI inflationis expected to gradually decline to around 2% andthenhover aroundthe target level of 2.0%. Core inflation is projected toremain stable at around 2% throughout the year.
▪The inflationtrajectoryis subject to risks related to movements intheexchangerateandglobaloil prices.
Source: Ministry of Data and Statistics.
Note: 1) Excluding core items.Sources: Ministry of Data andStatistics, Bank of Korea.
▢The current account surplusthis year is expected to remain in line with theprevious outlook of $130 billion.
In2025, the current account surplus is estimated to have slightly exceeded thepreviousoutlook of $115 billion, supported by robust semiconductor exports*.
*Customs exports ($709.7 billion) surpassed$700 billion for the first time, assemiconductorexports rose sharply (+21.9%,year-on-year) driven by a surge in AI-related demand.
▪Although the services account deficit is expected to widen due to adeteriorating
