The Organisation for Economic Co-operation and Development (OECD) has raised its growth forecast for Korea this year to 2.6 percent from 1.7 percent, an upward revision of 0.9 percentage points. It is the largest upgrade among G20 nations. The dramatic reversal comes just months after the OECD made the second-largest downward revision among G20 countries in March, citing Korea's high external dependence. The upgrade reflects strong performance in semiconductors and exports. The OECD expects export expansion centered on semiconductors to drive growth and private investment, raising its nominal economic growth forecast, which reflects price increases, to 10.4 percent. The general government debt-to-GDP ratio was lowered to 48.2 percent.
It is encouraging that the OECD presents such an optimistic outlook for the Korean economy while lowering its global growth forecast by 0.1 percentage points to 2.9 percent. Yet the reality that the semiconductor boom is fueling K-style polarization warrants caution. Semiconductors accounted for 42.3 percent of total exports in May, and 82.8 percent of all exports were concentrated in the top five companies — evidence that the concentration of growth is intensifying. Growth that leans on specific industries and a handful of large conglomerates is inevitably vulnerable to external shocks.
External risks are also significant. The Office of the United States Trade Representative (USTR) has signaled an additional 12.5 percent tariff on Korean products related to forced labor under Section 301 of the Trade Act. Notably, it has also identified Korea as a country with trade imbalances stemming from government intervention. This can be seen as a signal that the Donald Trump administration's tariff offensive is resuming.
The rebound in the growth forecast is clearly welcome news, but what is needed now is not premature celebration but a sober preparation for risk factors. In particular, the lower debt ratio must not be taken as license to loosen fiscal discipline. Amid the "three highs" — high inflation, a high exchange rate, and high interest rates — fiscal resources should be selectively channeled into supporting vulnerable groups and strengthening the competitiveness of future industries. A more proactive and strategic response is also needed against U.S. trade pressure. Should the Section 301 tariff exceed the reciprocal tariff rate of 15 percent, it could place a heavy burden on export competitiveness. The government must therefore mobilize all its diplomatic and trade capabilities to ensure that the balance of benefits under the Korea-U.S. tariff agreement is not undermined.
