Strong chip exports expected to spill over into private consumption from next year: BOK report

Korea's semiconductor export boom, fueled by global demand for artificial intelligence infrastructure, is set to significantly bolster private consumption starting next year, according to a central bank report released Thursday. While the Korean economy has experienced a notable acceleration in growth due to the robust semiconductor market, the pace of growth in private consumption has remained relatively sluggish.

The Bank of Korea (BOK) reported that Asia's fourth-largest economy expanded by 3.8% in the first half of the year compared to the same period last year, with private consumption growing by 2.6% over the same timeframe. This economic growth was primarily propelled by strong exports, led by the surge in semiconductor shipments. In September alone, exports increased by 83.5% year-on-year, reaching a record $120.9 billion, while semiconductor exports skyrocketed by 263% to an unprecedented $60.3 billion.

The BOK's report suggests that private consumption has been on a steady recovery since hitting a low in the first quarter of 2025. The extent to which the recovery remains strong and sustainable will hinge on the widespread distribution of the benefits generated by the economic expansion.