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

South Korea's economic recovery has yet to significantly benefit households, according to the state-run Korea Development Institute (KDI). The think tank's monthly economic assessment highlights that the recovery in household purchasing power is limited, primarily due to sluggish wage growth and high supply-side inflationary pressures, including persistent high oil prices.

Despite the overall economic recovery, propelled by the artificial intelligence (AI) sector, the KDI asserts that its benefits have not yet permeated the broader population. The KDI points out that manufacturing output is still expanding robustly, with exports and equipment investment surging, particularly in AI-related industries.

In September, South Korea's exports reached an all-time high of US$120.9 billion, primarily driven by a surge in chip shipments, with semiconductor exports crossing the $60 billion mark for the first time. The KDI notes that semiconductor and computer exports are growing rapidly, while exports of other AI infrastructure-related products, such as steel and nonferrous metals, remain strong.