This article provides a detailed analysis of the Bank of Korea's economic outlook announced on September 3, 2025, covering the upward revision of real GDP growth rate and risks from US tariff policies.
Upward Revision of GDP Growth Rate Forecast and Its Rationale
The Bank of Korea revised its 2025 real GDP growth rate forecast upward to 0.9%. The main rationale for this revision includes economic stimulus effects from supplementary budgets, with the government's proactive fiscal policies expected to function as short-term growth drivers.
Additionally, recovery trends in private consumption serve as important upward revision factors, with private consumption projected to grow by 1.4%, supporting the overall economy through domestic demand recovery. Furthermore, recovery of exports centered on semiconductors clarifies the structure where the manufacturing sector, Korea's main industry, contributes to growth.
Sectoral Growth Forecasts and Economic Structural Changes
Goods exports are projected to grow by 2.5%, with the global demand recovery in the semiconductor industry expected to directly contribute to Korea's improved export competitiveness. Facility investment is also expected to grow by 2.5%, reflecting corporate investment sentiment recovery and strengthened technology innovation initiatives.
However, construction investment faces a serious situation, with a significant decrease of -8.3% projected. This indicates prolonged adjustment phases in the real estate market, highlighting structural challenges in the Korean economy.
Serious Risk Assessment from US Tariff Policies
The Bank of Korea's most important warning concerns serious impacts of US tariff policies on Korea's GDP growth rate. Specific impact projections estimate growth rate reduction effects of 0.45 percentage points in 2025 and 0.6 percentage points in 2026, potentially offsetting approximately half of the upward-revised growth rate.
This tariff risk extends beyond single-year impacts, with greater effects expected in 2026, raising significant concerns about Korea's medium-term growth trajectory. Particularly, if tariffs on Korea's main export products including semiconductors, automobiles, and chemicals become reality, it would deal a devastating blow to Korea's export-driven economy.
Complex Risk Factors and Need for Policy Response
Beyond US tariffs, intensification of US-China trade friction raises concerns about supply chain disruptions affecting Korea. Many Korean companies depend on the Chinese market while simultaneously requiring access to US technology, potentially exacerbating Korea's sandwiched situation as bilateral conflicts intensify.
Continued construction sector weakness is also a structural challenge expected to continue as a GDP drag factor. Furthermore, international financial market instability presents risks of foreign investment volatility and rapid exchange rate fluctuations.
Dual Nature of Domestic Demand Recovery and External Demand Uncertainty
The Korean economy currently faces the dual nature of gradual domestic demand recovery and expanding external environment uncertainty. While private consumption and facility investment recovery trends demonstrate Korea's underlying strength, the vulnerability to external environmental changes is highlighted due to the high export dependence economic structure.
Although short-term economic stimulus effects from government supplementary budgets are recognized, depending on the timing and scale of US tariff policy implementation, upward growth rate revisions could be canceled out, making policy response agility an important challenge.
The article demonstrates that while the Korean economy is on a domestic demand-led recovery trajectory, it faces serious external demand risks from US protectionist policies, with policy flexibility and corporate adaptability being key to sustained future growth.