Survey of 10 economists and policy research experts
Semiconductor strength, growth rebound earn high marks for economic management
Growth seen in upper-mid 2% range this year; some say 3% is possible
Experts call for deregulation and tax reform aligned with global standards
Eight out of 10 economists rated the Lee Jae Myung administration's macroeconomic management and overall economic stewardship over its first year as "generally excellent" or better. The experts identified aggressive fiscal spending — including supplementary budgets — as the government's biggest economic achievement, and forecast that the South Korean economy will grow in the upper-mid 2 percent range this year, driven by strong semiconductor exports. They cautioned, however, that structural reforms to lift the economy's growth potential — including regulatory overhaul, investment promotion and the nurturing of advanced industries — remain unfinished business.
In a survey conducted to mark the first anniversary of the Lee administration, 10 economists and experts at state-run research institutes were asked to rate the government's macroeconomic management and policy execution over the past year. One respondent rated the performance "very excellent," seven rated it "generally excellent," and two rated it "generally insufficient."
Experts who gave positive assessments cited the rebound in the growth rate, rising share prices, strong exports and stable inflation as their main reasons.
Hong Seong-wook, head of the industrial data analysis division at the Korea Institute for Industrial Economics and Trade, said the government had driven the economic recovery through active fiscal policy and policy-based financing while keeping inflation relatively stable even as it pursued stimulus measures.
Kang Byung-gu, a professor of economics at Inha University, said the economy had rebounded to 1.7 percent growth in the first quarter of this year after contracting in the first quarter of last year, and that semiconductor-led export strength and a domestic demand recovery were continuing despite US tariff hikes. "The growth rate is likely to improve further going forward," he said.
Jeong Se-eun, a professor of economics at Chungnam National University, said the government had responded appropriately to tariff negotiations with the United States and managed growth and inflation in a stable manner. "Given how unfavorable the external conditions were, the economic management has been quite good," she said.
Woo Seok-jin, a professor of economics at Myongji University, cited the economic growth rate and rising share prices as reasons for his positive assessment. Song Young-gwan, a senior research fellow at the Korea Development Institute, said the government had managed potential sources of conflict — including disputes over Samsung Electronics bonuses — that could have affected the broader macroeconomy in a relatively stable way.
On the drivers behind the improved economic indicators, Yang Jun-seok, a professor of economics at Catholic University of Korea, said the growth trend itself was positive but that the surge in global semiconductor demand had played a large role. "Rather than the government's policies being particularly outstanding, there is an element of having benefited from favorable external conditions," he said. Kim Jeong-sik, an emeritus professor of economics at Yonsei University, also said that strong semiconductor exports had widened the current account surplus and pushed share prices higher.
By contrast, Kang Sung-jin, a professor of economics at Korea University, and Shin Se-don, an emeritus professor of economics at Sookmyung Women's University, rated the administration's economic policies as "generally insufficient." Kang said policies that heightened uncertainty in the labor market — such as the so-called Yellow Envelope Act — had been strengthened, while measures to boost investment and support self-employed workers had fallen short. Shin said he saw no clear achievements.
The biggest achievement experts attributed to the Lee administration's economic team was aggressive fiscal spending through supplementary budgets and other measures, with three respondents naming it as the top accomplishment. Others pointed to the conclusion of trade negotiations with the United States, the establishment of fair economic practices and market order, and the rise in the Kospi.
Assessments of fiscal soundness were relatively favorable. Six respondents said that despite rising national debt, the current level of fiscal expansion was acceptable for the purposes of economic recovery and future investment. Not a single expert rated the situation as dangerous enough to threaten the country's sovereign credit rating or impose an undue burden on future generations.
On the government's energy transition policy — expanding renewable energy and pursuing carbon neutrality — opinions were divided: five respondents said it should be pursued even if the opportunity costs are high; three said the direction is right but the pace is too fast and is placing an excessive cost burden on businesses in the short term; one said the speed and approach need to be adjusted to minimize damage to industrial competitiveness; and one said they were unsure.
Experts forecast that the South Korean economy will grow in the upper-mid 2 percent range this year, supported by strong semiconductor exports and a recovery in domestic demand. Some suggested that 3 percent growth was possible if exports, domestic demand and fiscal spending all maintained solid momentum.
Kang Byung-gu projected growth of 2.7 percent, citing expanded access to the US market amid the China-US rivalry and a buoyant semiconductor market. Woo Seok-jin of Myongji University, pointing to solid exports, domestic demand and fiscal conditions, forecast real growth of 3 percent and nominal growth of 10 percent for the year.
Kang Byung-gu, however, projected growth of between 1.8 and 2.5 percent, adding that the forecast could be revised downward depending on global economic uncertainty and conditions in the semiconductor market.
Regulatory reform and investment promotion were the most frequently cited policy priorities going forward. Yang Jun-seok called for improvements to laws and institutions to restore growth in industries beyond semiconductors, while Kim Jeong-sik urged deregulation of corporate rules in line with global standards along with labor and tax reform.
Nurturing advanced industries was also highlighted as a key priority. Hong Seong-wook stressed the need to strengthen advanced manufacturing capabilities and raise the potential growth rate. Woo Seok-jin of Myongji University and Kim Sang-bong, a professor of economics at Hansung University, recommended expanding research and development support for future industries such as AI, semiconductors and biotech.
Jeong Se-eun, however, while acknowledging the need for an AI transition, cautioned against excessive concentration on specific industries. She said strengthening the social safety net and expanding the state's role in education, healthcare and housing were needed to build economic resilience.
Kang Sung-jin recommended expanding the domestic demand base by addressing global economic uncertainty while improving regional balanced development and the income distribution structure. Shin Se-don of Sookmyung Women's University proposed a temporary cut in value-added tax as a measure to counter sluggish domestic demand.
Song Young-gwan advised that efforts to revise the Commercial Act to enhance corporate value and resolve the Korea discount should continue, and that expanding renewable energy and accelerating power grid infrastructure — including an energy highway — were needed to maintain competitiveness in AI and manufacturing.
By Bae Moon-suk, Kim Yong-hun and Yang Young-kyung
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