Chip upcycle, easing oil-related pressures to boost consumption in 2027: KDI
The global semiconductor upcycle, coupled with easing pressure from higher oil prices, is expected to lead to stronger consumption next year, a state-run think tank projected Thursday. The outlook came amid assessments that this year's global chip upcycle, driven by the artificial intelligence (AI) boom, has had a limited impact on domestic consumption due to the gradual spillover of its…
The global semiconductor upcycle, combined with a reduction in oil price pressures, is poised to drive increased consumption next year, according to a projection by the Korea Development Institute (KDI). This forecast comes as the global chip upcycle, fueled by the artificial intelligence (AI) surge, has thus far had a modest effect on domestic consumption due to the gradual dissemination of its advantages, while the surge in oil prices has more directly constrained spending capacity.
The KDI predicts that the adverse effects of oil price surges will gradually diminish in the coming year, while the positive effects of the semiconductor upcycle will spread, resulting in enhanced consumption compared to the present year. Additionally, bonuses and dividends distributed by prominent chip manufacturers could further stimulate domestic consumption, although geopolitical tensions in the Middle East may introduce certain downside risks.
Despite these potential challenges, the KDI recommends that the government avoid adopting measures designed to spur short-term spending and instead concentrate on enhancing economic growth in the long term.
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.
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