Korea's economic recovery yet to benefit households broadly: KDI

A state-run think tank in South Korea has reported that the benefits of the country's economic recovery have not yet trickled down to households broadly, according to its monthly economic assessment released on Monday. The Korea Development Institute (KDI) attributes this limited impact to subdued underlying wage growth and elevated supply-side inflationary pressures, particularly from persistently high oil prices.

Despite the recovery in household purchasing power, the KDI found that it remains constrained due to these factors. The think tank specifically highlighted the dynamic nature of the Korean economy, driven by the artificial intelligence (AI) industry. However, the KDI cautioned that the benefits of this growth have not yet reached households broadly.

The KDI's assessment noted that the Korean economy is still maintaining its recovery momentum, with manufacturing output continuing to grow at a solid pace. The country's exports and equipment investment continue to expand robustly, mainly fueled by AI-related sectors. This growth is being driven by a robust global demand for AI infrastructure investment, as reported by the KDI.

In September, South Korea's exports surged by a remarkable 83.5 percent compared to the previous year, reaching a record high of $120.9 billion. This significant increase was driven by a surge in chip shipments, indicating the strength of the country's AI-related sectors.