The Korea Institute for Industrial Economics & Trade (KIET), a state-run research institute, forecast on the 24th that the Korean economy will grow 1.9% next year. That is a higher growth outlook than the government (1.8%), the International Monetary Fund (IMF, 1.8%), the Korea Development Institute (KDI, 1.8%), and the Bank of Korea (1.6%). The institute said that despite a global economic slowdown and U.S.-origin tariff risks, a recovery in domestic consumption and investment will drive growth.
The Korea Institute for Industrial Economics & Trade (KIET) projected that next year private consumption will rise 1.7% from this year, and construction investment will increase 2.7%. However, it saw exports (on a customs clearance basis) falling 0.5% from a year earlier. It expected a base effect next year because export conditions have been so strong this year. It also said the United States' continued high-tariff policy will weigh on exports.
The Korea Institute for Industrial Economics & Trade (KIET) said industries in information technology (IT) such as semiconductors and information and communications devices, and in bio-health, will continue solid growth next year. By contrast, it projected industries such as steel and petrochemicals will be sluggish due to weaker demand and the impact of tariffs. It expected secondary batteries to see simultaneous declines in exports and production due to expanded overseas manufacturing.
Kwon Nam-hoon, president of the Korea Institute for Industrial Economics & Trade (KIET), said, "Next year, our economy will continue a recovery centered on artificial intelligence (AI) and semiconductors, but it will gradually enter a stabilization and downward phase," adding, "Overall, dependence on semiconductors has strengthened, and it is a concern that the competitiveness of other key industries is being challenged."