The Korea Development Institute (KDI) has upgraded its growth forecast for Korea this year to 3.2%, However, employment projections have taken a step back. On the 9th, KDI released its '2023 Economic Outlook for the First Half' and '2023 Labor Market Outlook'. In its report, KDI raised its growth forecast for this year from 2.6% in February to 3.2%, citing a strong rebound in exports and a gradual recovery in domestic demand. The 3.2% growth forecast is close to the government's earlier projection of 3.1% and is higher than the 2.9% predicted by the International Monetary Fund (IMF). However, KDI lowered its employment growth rate forecast for this year from 1.3% in February to 1.1%. The number of employed people is expected to increase by 310,000 this year, down from the previous estimate of 330,000. The forecast for the number of unemployed people also increased from 950,000 to 970,000. KDI attributed the downward revision of employment indicators to a decline in the number of employees in the 20s and a slowdown in the service industry. The unemployment rate is expected to remain at 2.9%.

The Korean Development Institute (KDI) has increased its forecast for South Korea's economic growth rate for this year to 3.2%, despite concerns over the impact on employment. The revised August outlook from KDI predicts the country's gross domestic product (GDP) will grow by 3.2% this year, up 0.7 percentage points from the 2.5% forecast in the first half of the year.

This marks the lowest annual increase since the severe outbreak of COVID-19 in 2020, which saw a job growth of -21.8 thousand people. While the semiconductor sector is driving the growth, the employment effects are limited due to the industry's lack of job creation, especially outside of the sector. The government had previously forecasted 3.0% growth for the second half of the year based on the economic growth strategy.

KDI's economic outlook chief, Kim Mi-ru, explained that the 0.7 percentage point increase in the growth rate forecast is primarily due to the semiconductor boom and its ripple effects, with investment in AI infrastructure contributing to a 7.9% increase in equipment investment. The semiconductor industry's export growth was 8.7% compared to the previous year, and manufacturing output is estimated to be at 3.6 trillion dollars, a significantly higher number than the previous 1.9 trillion dollars.

However, the employment growth is projected to be only 11 thousand people, down 42% from the previous year.