Seoul: South Korea's goal of achieving a potential growth rate of 3 percent is considered viable, though challenging, on the back of the country's industrial transformation driven by the recent semiconductor supercycle, the finance minister said Tuesday. The remark came after South Korea unveiled its second-half economic policy plan earlier in the day, in which the government vowed to achieve economic growth of 3 percent this year, up 1 percentage point from its previous projection.
According to Yonhap News Agency, the country also vowed to achieve a potential growth rate of 3 percent, become one of the world's top four exporters, and raise gross national income per capita to US$50,000. "We have come up with the 3-4-5 economic target, and this does not just reflect the semiconductor cycle," Finance Minister Koo Yun-cheol said during a press conference on the economic policy plan.
Koo mentioned that while the recent boom is concentrated in memory chips, industries in other related areas, such as next-generation power semiconductors and physical artificial intelligence (AI), are also accelerating their growth. "Among the targets, South Korea is already in fifth place in terms of exports, so (becoming the fourth-largest exporter) would not be a high goal," Koo said, also noting South Korea's gross domestic product (GDP) per capita is set to reach around $40,000 this year.
However, Koo acknowledged that the 3 percent target for potential growth may be a little challenging. "But the goal reflects the government's policy commitment to achieve it through industrial transformation from the current concentration on memory chips," he added. The potential growth rate refers to the potential rate of increase in the GDP a country can sustain by fully utilizing labor, capital, and other resources without triggering inflation.
The Organization for Economic Cooperation and Development (OECD) estimated South Korea's potential growth rate at 1.85 percent for 2025 and 1.66 percent for this year.