[2026 Audit] Shin Hyunsong: "OECD Forecasts Korea's Growth at 3.7% This Year... Above 3% Next Year"

"I agree that it will be difficult to return easily to an era of ultra-low interest rates"
Will implement policies to prepare for a period of high growth and high interest rates

Bank of Korea Governor Shin Hyunsong cited the 3.7% growth forecast issued by the Organisation for Economic Co-operation and Development (OECD) in response to a question about how much the Bank of Korea might raise its outlook for the country's economic growth this year.

Bank of Korea Governor Shin Hyun-song answers lawmakers' questions during a comprehensive audit of the Ministry of Planning and Budget, the Bank of Korea and other institutions by the National Assembly's Finance and Economy Committee at the National Assembly in Yeouido, Seoul, on the 23rd.

At a comprehensive audit of the Bank of Korea by the National Assembly's Finance and Economy Planning Committee at the National Assembly in Yeouido, Seoul, on Oct. 23, Shin forecast that real gross domestic product (GDP) growth would be in the 3% range both this year and next year. When Democratic Party of Korea lawmaker Oh Ki-hyung asked, "Do you think it is highly likely that next year's growth will reach the 3% range, rather than the 2.9% forecast made last August?" Shin answered, "Yes."

Asked about his remark that there was room to adjust this year's growth forecast by a "considerable amount" from the previous forecast of 3.3%, he said, "I can't give an exact figure," adding, "The Organisation for Economic Co-operation and Development (OECD) raised its growth forecast for this year to 3.7%." This could be interpreted to mean that the Bank of Korea may also raise its forecast to a similar level.

Meanwhile, he said that concerns about consumption-related spending did not mean rejecting an active role for the government. "I was concerned about cases where temporary funding creates long-term spending obligations," Shin said, reiterating that "this creates rigidity and makes it difficult to reverse." He also stressed the need to support vulnerable borrowers to address polarization. "Measures to support vulnerable borrowers also have a significant fiscal component," Shin said, noting that "in that sense, fiscal and monetary policies should be implemented in harmony."

Asked by Democratic Party of Korea lawmaker Kim Tae-nyeon whether it was accurate to say that it would be difficult to return easily to an era of ultra-low interest rates like the one in the past, Shin replied, "I agree with that assessment." He also agreed with Kim's comment that policymakers should not simply wait for interest rates to fall again, but should establish an economic policy framework based on the prospect of a prolonged period of high interest rates. "We will implement sound policies to prepare for a period of high growth and high interest rates," Shin said.

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