The Bank of Korea is expected to drastically upwardly revise this year's real Gross Domestic Product (GDP) growth rate from the previous 2.0% to 2.5~2.6% in its revised economic outlook to be announced on the 28th. As the first-quarter growth rate significantly exceeded expectations due to robust semiconductor exports, the annual forecast is also projected to rise.

According to a survey conducted by Yonhap News Agency on the 24th targeting six economic experts, the majority predicted that the BOK would raise this year's growth rate forecast by at least 0.5 percentage points. This is because the first-quarter real GDP growth rate (1.7% compared to the previous quarter) announced last month came in nearly double the February forecast (0.9%). Experts assessed that the upward trend in semiconductor exports is highly likely to continue throughout the year, anticipating that the BOK will also adjust its growth rate to the 2.5~2.6% level.

[Semiconductor Boom and Current Account Outlook]

Experts believe that the semiconductor super-cycle, triggered by expanded investment in artificial intelligence (AI), is highly likely to continue into the first half of next year. Semiconductor exports were a key factor in the first-quarter economic rebound, and their ripple effects on facility investment and overall production were analyzed to be significant. The export growth trend is expected to be maintained until semiconductor prices begin to decline in earnest. Accordingly, a forecast was also presented that this year's annual current account surplus will exceed 20 billion dollars, reaching around 26 billion dollars.

[Next Year's Outlook and Downside Risks]

It is predominantly expected that next year's growth rate forecast will also be slightly upwardly revised from the previous 1.8% to 1.9~2.0%. However, the prolongation of the Middle East war and the volatility of the semiconductor industry's business cycle were still cited as uncertain factors.

[Inflationary Pressure and Oil Price Variables]

In terms of prices, the consumer inflation forecast is highly likely to be upwardly adjusted due to the impact of surging oil prices originating from the Middle East and the high exchange rate. Experts expected this year's inflation rate to rise to the 2.5~2.7% level from the previous 2.2%. Next year's inflation rate is projected to settle around the 2.1~2.3% level.

The possibility that the secondary ripple effects of high oil prices will materialize in earnest from the third quarter onwards was also cited as a major variable. Some raised concerns that if the oil price shock is not resolved in the short term, the inflationary burden could last longer than expected. The BOK is expected to simultaneously adjust its inflation forecast along with the growth rate upward revision in this revised outlook.