KIET Forecasts Korea’s 2024 Exports at USD 924.4 Billion… Raises GDP Growth Outlook from 1.9% to 2.5%

KIET Releases 2026 Second Half Economic and Industrial Outlook

Exports and Trade Surplus Projected to Hit All-Time Highs on Strong Semiconductor Performance

Dubai Crude Expected to Average USD 92 per Barrel

"Even with Gradual Reopening of Hormuz, Oil Price Decline Will Be Slow"

This year, Korea’s exports are projected to surpass USD 920 billion, with a trade surplus reaching USD 220 billion—both on track to set all-time records, according to a forecast by a national research institute. The unprecedented boom in Korea’s semiconductor sector, driven by surging demand amid fierce artificial intelligence (AI) competition among major U.S. tech companies, is cited as the key driver. On this basis, the Korea Institute for Industrial Economics & Trade (KIET) has raised its forecast for Korea’s real gross domestic product (GDP) growth rate from 1.9% to 2.5%.

KIET announced its “2026 Second Half Economic and Industrial Outlook” on May 26, presenting these findings.

Hong Sungwook, Senior Research Fellow at the Industrial Economic Data Analysis Division of KIET, stated, “This year, Korea’s real economy has benefited from a notable increase in domestic consumption compared to the previous year, a rapid surge in IT exports centered on semiconductors, expanded investments related to semiconductors, and improved terms of trade—all of which have positively contributed to growth.” He added, “Despite heightened external uncertainty, including the unexpected U.S.-Iran war early this year, exports have recorded double-digit growth rates, driven by increased AI-based demand for semiconductors and information and communication technology (ICT).”

In fact, Korea’s exports have reached record highs each month, buoyed by strong semiconductor performance. According to the Korea Customs Service, cumulative exports from January 1 to May 20 this year reached USD 359.131 billion, marking a 43.9% surge compared to the same period last year. In just the first 20 days of May, semiconductor exports alone amounted to USD 21.951 billion, representing a staggering 202.1% increase.

KIET forecasts that total exports for the year will reach USD 924.4 billion, up 30.3% from 2025, and that the trade surplus will reach a record USD 219 billion. Notably, at the end of last year, KIET had estimated 2026 exports at USD 697.1 billion, but reflecting the unprecedented boom in semiconductors, the projection has been raised by USD 227.3 billion (32.6%).

Reflecting this strong export performance, KIET also revised its real GDP growth forecast upward, from 1.9% to 2.5%—an increase of 0.6 percentage points. Hong explained, “In 2026, domestic economic growth will face downward pressure on consumption and production due to energy supply instability and rising costs linked to the Middle East war. Nevertheless, expansionary fiscal policy, including supplementary budgets, along with continued investment and export growth driven by robust IT industries such as semiconductors, are expected to support a growth rate around 2.5%.”

He further identified geopolitical risks and the strength of the consumption recovery as key variables affecting Korea’s economy. Hong said, “Externally, factors such as the evolving nature of geopolitical risks from the Middle East war, the degree of inflationary impact from higher energy prices, the sustainability of the AI-driven ICT boom, and financial market volatility due to changes in monetary policy will be influential. Domestically, the main variables will be whether the recovery in consumption and investment momentum can be sustained, and the extent of negative impacts on exports due to uncertainty in overseas trade conditions.”

This year, international crude oil prices are expected to remain in the low USD 90s per barrel. KIET projects the average Dubai crude price at USD 94.8 per barrel for the first half of the year (up 31.8% year-on-year), USD 89.3 for the second half (up 33.4% year-on-year), and an annual average of USD 92.1 (up 32.6% year-on-year). Hong stated, “In the second half of 2026, international oil prices are expected to decline only gradually, given ongoing supply disruptions due to the Middle East war—even assuming no further escalation of the U.S.-Iran conflict and a gradual reopening of the Strait of Hormuz.” He added, “Key factors that could drive oil price volatility include whether the U.S. and Iran reach a peace agreement, the timing of the full reopening of the Strait of Hormuz, the speed of recovery for major oil and gas facilities in the Middle East, shifts in U.S. sanctions policy toward Iran, and production control policies by OPEC+—the coalition of OPEC, Russia, and 10 other major oil-producing countries.”

This content was produced with the assistance of AI translation services.