NABO Significantly Raises GDP Growth Forecast to 3.5% for This Year... Per Capita GNI at 63.91 Million Won

Next Year's Real GDP Growth Projected at 2.7%
Nominal GDP Growth to Reach 22.0% This Year

The National Assembly Budget Office (NABO) has projected this year’s real gross domestic product (GDP) growth rate at 3.5%. For next year, NABO forecasts real GDP growth of 2.7%.

On September 30, NABO released these growth projections through its report, “2027 NABO Economic Outlook: 2026-2030.” Previously, on August 27, the Bank of Korea forecast this year’s GDP growth at 3.3%, while the government, on July 15, predicted 3.0%. Compared to these projections by major economic institutions, NABO expects a higher GDP growth rate for this year.

NABO explained, “We have primarily factored in stronger-than-expected exports and improvements in facility investment,” raising this year’s forecast by 1.5 percentage points compared to its revised outlook in March.

Accordingly, NABO projects nominal GDP growth at 22.0% for this year and 7.3% for next year.

From 2026 through 2030, NABO expects real GDP growth to average 2.7%. NABO observes, “During the projection period, the anticipated real GDP growth path is expected to remain above the trend growth rate, before gradually converging toward it.”

In addition, NABO analyzed that nominal gross national income (GNI) will rise by 21.8% this year and by 7.1% in 2027. Consequently, per capita GNI is projected to reach 63.91 million won in 2026 and 68.43 million won in 2027.

However, NABO noted, “As income growth has been centered on operating surpluses, there is expected to be a time lag before increases in national income translate into household income,” adding that, “If future increases in special compensation and dividends, as well as rises in investment and employment, lead to greater household income and expand domestic demand, the increase in national income is expected to gradually extend to the household sector.”

Meanwhile, NABO pointed out a concern regarding its economic growth rate outlook, stating, “There are persistent concerns that the concentration in the semiconductor sector may prevent the fruits of economic growth from spreading, with benefits being focused on certain industries and groups.” It remains uncertain whether robust exports and a current account surplus will, as expected, lead to revitalized domestic investment and job creation. Additionally, NABO highlighted ongoing risk factors such as the possibility of slower AI investment due to rising long-term interest rates in the United States, the uncertainty in trade environments stemming from U.S. tariff policies, and intensifying competition with China, including in major export sectors like semiconductors.

This content was produced with the assistance of AI translation services.