2026 NABO Economic Outlook


 

Published on March 27, 2026
Published by Macro-Economic Analysis Division


 

❑ The National Assembly Budget Office (NABO) published the 2026 NABO Economic Outlook on March 27 (Friday).
   ◦ NABO publishes economic outlook reports in March and September every year. In this issue, the Korean economy's growth rate for 2026 was adjusted upward by 0.1%p to 2.0%, reflecting changes in both domestic and global economic conditions since the previous outlook was published in September last year.
    ※ Economic growth rates projected by major domestic and global institutions (previous → latest, %):
     NABO (1.9→2.0), MOFE (1.8→2.0), BOK (1.8→2.0), KDI (1.8→1.9), IMF (1.8→1.9), OECD (2.2→1.7)
   ◦ The 2026 NABO Economic Outlook is prepared to support the National Assembly's legislative activities, including budget and settlement reviews and bill deliberations. The report is organized into four sections - expenditures, production, income, and sustainable growth.

❑ The outlook for key sectors of the Korean economy in 2026 is as follows:
   ◦ Real GDP growth rate for 2026 is expected to reach 2.0%, higher than the previous year, driven to robust facility investment and export growth led by the semiconductor sector, despite a slowdown in construction investment.
   ◦ Real gross value added for 2026 is expected to grow by 2.1%, as private consumption records a modest recovery and the supply-demand imbalances and elevated prices in the global memory chip market continue, despite a slowdown in the construction sector.
   ◦ Nominal GNI growth rate for 2026 is projected at 6.1%, thanks to improved profitability in export industries, including semiconductors, and a swift recovery in corporate earnings. Nevertheless, household income is expected to improve at a slower pace than GNI, with household disposable income growing by only 4.6%.
   ◦ The potential economic growth rate for 2026 is projected at 1.8%, consistent with the previous projection.

❑ Meanwhile, external economic conditions have become highly unstable since the outbreak of the conflict in the Middle East.
   ◦ The risk of inflationary pressures has increased with a sharp short-term rise in global oil prices. The blockade of the Strait of Hormuz is disrupting the supply of crude oil from the Middle East.
   ◦ If this situation persists over the long-term, the Korean economy could face serious pressure.

❑ Reflecting the aforementioned conditions, this report conducts a scenario analysis of the impact of the crisis in the Middle East on the Korean economy.
   ◦ (Baseline scenario: early resolution) Average annual global oil price at USD 75 per barrel
   (Alternative scenario: protracted war) Average annual global oil price at USD 100 per barrel
   ◦ Under the early resolution scenario, the economy is likely to grow at 2.0%; under the protracted war scenario, the growth rate could decrease by an additional 0.2~0.3%p.

❑ While the government's supplementary

❑ budget proposal to ease the financial burden caused by the Middle Eastern crisis is expected to support recovery in domestic demand, its effects has not been reflected in this projection.
   ◦ This is because the report is published (as of March 27) prior to the submission of the proposal.
   ◦ NABO plans to publish the Analysis of the First Installment of the Supplementary Budget Proposal for 2026 once the proposal is submitted.