On the 14th, the government presented its "3-4-5 Vision" as its second-half economic growth strategy, aiming to achieve a 3% potential growth rate, become a top-four exporter, and reach 50,000 dollars in national income. It raised its forecast for this year's real gross domestic product (GDP) growth rate to 3.0%, up 1.0 percentage point from the previous estimate. Backed by fiscal capacity from the semiconductor boom, the government also expressed confidence that it would substantially raise the potential growth rate—which fell to the 1% range last year—by concentrating its resources on "three mega-projects": semiconductors, artificial intelligence (AI) data centers, and physical AI. President Lee Jae-myung said, "The 'next 30 years' of the Republic of Korea will hinge on what achievements we make in this second half."
If the government's forecast materializes, Korea's economy will grow at its largest pace in five years since 2021 (4.7%). In addition, citing the recent strong exports, the government sharply raised its forecast for this year's nominal GDP growth rate from 4.9% to 12.3%. It even offered a rosy outlook that per-capita gross national income, which has remained in the "30,000-dollar box range" for 12 years, would rise to 40,000 dollars. However, the economic risk factors lurking everywhere are by no means easy to dismiss. With the possibility of renewed war growing even after the ceasefire agreement between the United States and Iran, stable and sustainable growth could be halted if the "three highs" pressure of prices, high exchange rates, and high interest rates intensifies. The additional tax revenue that serves as funding for ultra-large-scale future investment could also be limited to a modest level if variables arise in the semiconductor boom.
The biggest threat factors are the problems of the "K-shaped divide" and "jobless growth." While semiconductors are becoming a solid engine for the Korean economy, past mainstay industries such as steel and petrochemicals have been driven into a survival crisis, pushed back by China's offensive. Moreover, the government on the same day lowered its projected increase in the number of employed persons this year from 160,000 to 150,000. In such a situation, if the qualitative decline of the job market is neglected while intoxicated by the semiconductor illusion, it will bring about a slump in domestic demand and a decline in the potential growth rate. Now is the time to aggressively channel the money earned from the semiconductor boom into breaking down the dual structure of the labor market and into structural reform. The public and private sectors must join forces to double the competitiveness of core industries such as semiconductors, while fostering new industries such as robotics and defense to actively address the imbalance in industrial structure.
