Moody's raises forecast to 3.5%, KDI upgrades this year's growth rate from '2.5% to 3.2%'

The government-funded research institution Korea Development Institute (KDI) has raised its growth rate forecast for this year to 3.2%, reflecting the semiconductor market's performance.

On the 19th, KDI released its "Economic Outlook," presenting this year's economic growth rate forecast at 3.2%. This is 0.7 percentage points higher than the previous forecast of 2.5% released in May.

KDI cited a boom in the semiconductor industry as the reason for upgrading the growth rate forecast. It analyzed that global semiconductor demand has shown levels higher than expected, with effects spreading to this year's exports and capital investment. In particular, it is expected that some of these effects will also spread to private consumption next year.

Kim Mi-ru, Director of KDI's Macroeconomics and Finance Division, explained, "Roughly speaking, about 0.6 percentage points of the upward adjustment (0.7 percentage points) can be attributed to the semiconductor industry and its ripple effects," adding that "semiconductors account for more than half of the growth component (3.2%) compared to last year's GDP (gross domestic product)."

Earlier, international credit rating agency Moody's also raised South Korea's economic growth rate forecast for this year to 3.5% in a report released on the 13th. This represents an upward revision of 1.0 percentage points from the May forecast of 2.5%. Moody's also cited the increasing trend in semiconductor exports as the main reason for the upgrade.