Why I Fear the Aftermath of Rapid Growth | Cho Young-moo, Head of NH Financial Research Institute (Part 1)

Summary

Cho Young-moo, Head of NH Financial Research Institute, discusses the US and Korean economic outlooks. He expects the US to avoid a traditional recession, while Korea's 2026 growth rebounds to roughly 2% on base effects, semiconductor export strength, and fiscal spending. He warns that Korea's recovery and KOSPI rally are narrowly concentrated, with polarization and aggregate indicators creating an illusion that could mask underlying weakness.

• The US economy is expected to see a mild slowdown rather than a hard landing, helped by tariff-related net export effects and FDI.
• Korea's 2025 growth was weak near 1%, but 2026 growth is projected to rebound toward 2%.
• Semiconductor exports, especially HBM and rising legacy chip prices, are a key support for Korea's outlook.
• Government fiscal expansion is expected to help construction and SOC investment, but it also requires more than KRW 100 trillion in deficit bond issuance.
• Rising market interest rates and bond-market stress are side effects of the fiscal deficit.
• Korean growth and stock-market gains are highly concentrated, with only about 30% of stocks recovering prior highs.
• The speaker warns that KOSPI record highs and total export or GDP headlines may create an illusion of broad prosperity.
• He sees second-half 2026 slowdown risk if semiconductor momentum fades, with policy responses potentially lagging.