Major global investment banks have raised their average forecast for South Korea's economic growth in 2026 to 3% for the first time, supported by strong semiconductor exports driven by the artificial intelligence boom.

According to the Yonhap News Agency, forecasts from eight investment banks, including JP Morgan (NYSE: JPM) and Citi (NYSE: C), averaged 3% at the end of June, up 0.2 percentage points from a month earlier, according to data compiled by the Korea Centre for International Finance.

The average forecast has now reached the 3% mark for the first time. It stood at 2% at the end of 2025 before rising to 2.1% in January, 2.4% in April, 2.8% in May and 3% in June.

JP Morgan raised its forecast to 3.7% in June from 3% a month earlier. Citi increased its projection to 3.5% from 3%.

Barclays and Goldman Sachs each forecast growth of 2.7%, while HSBC and UBS projected 2.8%. Bank of America expects the economy to expand 3.1%, while Nomura forecasts 2.4%.

The stronger outlook reflects robust semiconductor exports, fuelled by rising global demand for AI-related chips.

South Korea's exports climbed to a record $102.25bn in June, up 70.9% from a year earlier and exceeding the $100bn mark for the first time.

Semiconductor exports almost tripled to a record $44.82bn.

The latest figures from the Bank of Korea showed the economy expanded 1.8% in the first quarter, 0.1 percentage points above the central bank's preliminary estimate.

Against that backdrop, the Bank of Korea is widely expected to raise its 2026 growth forecast in August from its current projection of 2.6%.