Seoul, August 19 (QNA) - The government-run Korea Development Institute (KDI) forecast that South Korea’s economy will grow by 3.2% in 2026, raising its previous forecast of 2.5%, amid stronger-than-expected global demand driven by the AI boom.

South Korea’s Yonhap News Agency quoted the institute as saying that the revision came as global demand for semiconductor products remained stronger than expected, leading to increased exports and facility investment, which are expected to eventually boost private consumption in 2027.

Accordingly, the institute also projected economic growth of 2.2 percent for 2027, up 0.5 percentage point from its previous outlook.

It also said that South Korean export volumes are expected to grow 8.7 percent and 5 percent in 2026 and 2027, respectively, despite US tariff measures and geopolitical uncertainties in the Middle East, as AI-related investment around the globe is expected to offset such hurdles. (QNA)