Goldman Sachs Raises South Korea's 2023 Real GDP Growth Forecast to 2.7%

On June 23, Goldman Sachs released a report indicating that the surge in AI capital expenditures is demonstrating a stronger and more enduring trend than expected for South Korea's chip cycle. The firm anticipates that the AI-driven super surplus will accelerate by the end of the year, pushing total exports to exceed $1 trillion, with the current account surplus reaching a historic high of approximately 15% of GDP. Goldman Sachs has raised its forecast for South Korea's real GDP growth in 2026 to 2.7% (+10 basis points) and in 2027 to 2.3% (+40 basis points), both above market consensus, primarily due to the stronger and more lasting impacts of AI through capital expenditures, R&D, and wealth effects. Under the latest baseline assumption regarding the reopening of the Strait of Hormuz, the firm has kept its inflation forecasts unchanged at 2.6% and 2.2%, while extending the interest rate hike cycle to 2027 and raising the terminal policy rate forecast from 3% to 3.25%.