The Korea Institute for International Economic Policy (KIEP) said this year's global economic growth rate will be 3.0%, down 0.4 percentage points from a year earlier. Despite the Middle East war, it projected the same level as the growth outlook for this year released in November last year. KIEP said the outlook was "due to upward revisions for the United States and China as investment in artificial intelligence (AI) expands," while cautioning against downplaying the spillover effects of the Middle East war.
On the 12th, KIEP, in its "2026 global economic outlook," said this year's global growth rate will be 3.0% and analyzed that the global economy's low-growth trend is continuing. It said 3.0% growth is below the world's average growth rate of 3.7% in the 10 years before the COVID-19 pandemic (2010-2019).
KIEP analyzed that expanded AI investment in the United States and China offset the shock from the Middle East war. KIEP projected this year's economic growth for the United States and China at 2.0% and 4.5%, respectively, figures that are 0.4 percentage points and 0.3 percentage points higher than the outlook in November last year.
Lee Si-wook, KIEP president, said, "It seems we were conservative in analyzing this year's economic growth rates for the United States and China in November last year. The shares of the United States and China in global GDP far exceed one-third, so their impact on the global growth rate is large," but added, "Because uncertainty in energy prices is high, this outlook is still bound to be volatile."
Still, KIEP saw that the rise in energy prices stemming from the Middle East war, U.S. tariff policy, and growing fiscal burdens in major countries will act as factors threatening their economies. It particularly analyzed that growth in advanced economies such as Europe and Japan will be sluggish. KIEP expects Europe and Japan to post growth of 0.9% and 0.7% this year, respectively. Those figures are down 0.6 percentage points and 0.5 percentage points from a year earlier.
For Korea, while benefits from AI investment will continue, centered on the semiconductor industry, polarization is expected to deepen as energy-intensive industries face expense pressures. KIEP analyzed, "AI investment is currently a key driver supporting Korea's macroeconomy, but at the same time it reveals a dual nature that could become a source of structural vulnerability."