South Korea Economic Outlook 2026: 1.8% Growth Faced with Tariff Headwinds
South Korea Economic Outlook 2026: KIS predicts a 1.8% growth recovery driven by the chip sector, but warns of U.S. tariffs and industry-wide performance gaps.
The semiconductor boom is back, but it's not lifting all boats. Korea Investors Service (KIS) projects South Korea's economy will expand by 1.8% in 2026, though sharp industry discrepancies and trade barriers loom large.
South Korea Economic Outlook 2026: A Fragile Rebound
According to Yonhap, the local credit rating agency KIS delivered a sobering yet cautiously optimistic outlook for Asia's fourth-largest economy during a web seminar. While monetary easing and recovering local demand provide a tailwind, the economy's heavy reliance on semiconductors remains a structural concern.
| Outlook | Industries |
|---|---|
| Positive Prospects | Chips, Defense, Shipbuilding |
| Facing Headwinds | Petrochemicals, Construction, Steel, Secondary Batteries |
The Tariff Factor and Weak Won
Export growth is expected to lose momentum later this year as U.S. import tariffs begin to take full effect. Adding to the complexity, KIS expects the KRW-USD exchange rate to favor a weak local currency throughout the year, potentially squeezing margins for importers.
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