Chip-driven growth faces headwinds from weak domestic demand, high oil prices
Korea's economy is expected to maintain strong growth in the fourth quarter on the back of robust semiconductor exports, but weak domestic demand and rising oil prices are emerging as renewed risks, analysts said Sunday. The Organization for Economic Cooperation and Development (OECD) recently raised its 2026 economic growth forecast for Korea to 3.7 percent from its June forecast of 2.6 percent,…
Korea's economy is projected to continue expanding robustly in the fourth quarter, primarily propelled by thriving semiconductor exports. However, analysts caution that domestic demand remains subdued and high oil prices pose rising risks, according to experts on Sunday. The Organisation for Economic Co-operation and Development (OECD) recently upgraded its 2026 growth forecast for Korea to 3.7 percent from a June projection of 2.6 percent, citing swelling industrial output and export expansion.
This marks the largest upward revision among the group of 20 leading economies, a 1.1 percentage point surge announced on Wednesday. Concurrently, the Asian Development Bank also revised up its growth outlook for Korea to 3.2 percent from its July projection of 2.6 percent, attributing the rise to strong exports and corporate earnings driven by the artificial intelligence (AI) boom.
Unquestionably, strong export growth, predominantly driven by semiconductors, has been instrumental in underpinning the optimistic outlook. According to the Ministry of Trade, Industry and Resources, Korea's exports surged to a record $98.25 billion in August, a staggering 68.7 percent increase year-on-year.
Written by urgent.news from The Korea Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
