Photo : YONHAP News
South Korea’s potential growth rate is projected to fall below one-point-five percent for the first time next year, despite a strong rebound in economic growth driven by the semiconductor sector, according to the Organization for Economic Cooperation and Development (OECD).
OECD data released Sunday shows the country’s potential growth rate declining from one-point-85 percent last year to one-point-66 percent this year, before dropping further to one-point-52 percent in 2027.
The organization also forecast that the year‑on‑year potential growth rate will slow to one-point-46 percent in the fourth quarter of next year, extending a relatively steep downward trend.
It marks the first time the OECD’s estimate of South Korea’s potential growth rate has fallen below the one-point-five percent threshold since the organization began publishing the data.
Potential growth refers to the maximum pace at which an economy can expand without fueling inflation, assuming full use of labor, capital and other productive resources. A declining rate is generally viewed as a sign of weakening economic fundamentals.