Why did the Korea Development Institute say the Korean economy is improving despite global uncertainties?

The institute said exports and equipment investment are growing strongly as AI infrastructure expands at home and abroad. It also said manufacturing production is expanding in related industries even as Middle East developments remain uncertain.

How strong were Korea's exports and investment in the latest KDI assessment?

Exports rose 68.7 percent in August from a year earlier, driven by semiconductor shipments that climbed more than 200 percent. Facility investment also increased 24.9 percent in July on higher spending for semiconductor-related facilities and equipment.

What risks did KDI say could limit Korea's economic improvement?

KDI said private consumption remains modest because household purchasing power has improved only limitedly. It also pointed to U.S. tariff policies and lingering geopolitical instability in the Middle East as continuing uncertainties.

Korean economy continues to improve on strong AI-led exports, investment

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Summary

The Korean economy continued to improve, supported by strong exports and investment tied to AI infrastructure at home and abroad, the Korea Development Institute said Monday. It said industrial output rose 3.1 percent in July and exports expanded 68.7 percent in August from a year earlier. Facility investment also rose 24.9 percent in July, while private consumption remained modest. The KDI said U.S. tariff policies and geopolitical instability in the Middle East remain uncertainties.

Key Facts

Industrial output rose 3.1 percent in July from the previous month, slower than June's 4.4 percent increase but above the second-quarter average of 2.9 percent.
Exports expanded 68.7 percent in August from a year earlier as outbound semiconductor shipments surged more than 200 percent on rising chip prices.
Facility investment increased 24.9 percent in July, supported by spending on semiconductor-related facilities and equipment.

By Yonhap

Published Sep 7, 2026 12:19 pm KST

Containers are stacked at a port in the southeastern city of Busan, Sept. 1. Yonhap

The Korean economy continued to improve, supported by strong exports and investment related to artificial intelligence (AI) infrastructure at home and abroad, a state-run think tank said Monday.

"The Korean economy continues to improve, led by sectors closely tied to AI-related investment," the Korea Development Institute (KDI) said in its monthly economic assessment. It said the analysis comes despite persistent uncertainties surrounding developments in the Middle East,

"Exports and equipment investment continue to post strong growth amid expanding AI infrastructure investment, while manufacturing production continues to expand in related industries," the KDI said.

Industrial output rose 3.1 percent in July from the previous month, slowing from a 4.4 percent increase in June, but remaining above the second-quarter average of 2.9 percent, indicating steady improvements.

Exports expanded 68.7 percent in August from a year earlier as outbound shipments of semiconductors surged more than 200 percent on rising chip prices.

Investment remained strong, with facility investment rising 24.9 percent in July on increased spending on semiconductor-related facilities and equipment.

However, the think tank noted that private consumption remained modest as the broader economic improvement has yet to fully feed through to household incomes.

"Consumption is improving only modestly, constrained by the limited improvement in household purchasing power," it said.

Retail sales fell 0.8 percent in July, reversing a 3.9 percent growth in June, due to a sharp decline in durable goods sales.

The KDI also pointed out that Asia's No. 4 economy still faces uncertainties, including U.S. tariff policies and lingering geopolitical instability in the Middle East.

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