KDI raises Korea's 2026 growth outlook to 3.2% amid AI boom

The Korea Development Institute (KDI) has raised its growth outlook for the Korean economy in 2026, projecting it to be 3.2 percent. This upward revision was driven by stronger-than-expected global demand, primarily fueled by the artificial intelligence (AI) boom. The KDI's previous forecast had been 2.5 percent. The increased global demand for semiconductor products has led to higher exports and facility investments, which are anticipated to boost private consumption in 2027.

Consequently, the KDI also revised its growth projection for 2027 upward, now predicting it to be 2.2 percent, an increase of 0.5 percentage points from its earlier estimate. Despite challenges such as U.S. tariff measures and geopolitical uncertainties in the Middle East, the KDI anticipates Korean export volumes to grow by 8.7 percent in 2026 and 5 percent in 2027.

This growth is expected to be sustained by AI-related investments worldwide, which are projected to overcome these obstacles. The KDI also noted that Korea is currently experiencing a surge in exports and facility investment as a result of the AI boom. Computer, electronic, and optical instrument exports continue to flourish amid these positive trends.