KDI Raises Korea Growth Forecast to 2.5% as Chip Exports Offset Mideast Risks

The Korea Development Institute (KDI) said on May 13 in its first-half 2026 economic outlook that it raised Korea’s GDP growth forecast for this year to 2.5% from 1.9%, a 0.6 percentage point increase. The revision came three months after its February projection. Major global investment banks, including JPMorgan, Citi and Nomura, have also been lifting their forecasts for Korea’s growth. The key factor is a surge in semiconductor exports fueled by expanding global investment in artificial intelligence (AI). That strength is seen as offsetting risks from prolonged Middle East conflict, including high oil prices and trade uncertainty. However, if Middle East-driven oil prices remain elevated, inflationary pressure could weigh on Korea’s economy. With U.S. consumer inflation reportedly at its highest level in three years, markets are watching when the Bank of Korea may consider a base-rate increase. Source: rss.donga.com