Seoul: The Organization for Economic Cooperation and Development (OECD) has increased South Korea's economic growth forecast for 2026 to 2.6 percent, up from a previous estimate of 1.7 percent three months earlier. This revision comes as the country experiences a surge in chip exports fueled by the artificial intelligence boom.

According to Yonhap News Agency, the OECD highlighted that South Korea's outbound shipments of chips are expected to sustain economic growth. In May, South Korea's exports reached a record high of US$87.8 billion, marking a 53 percent increase compared to the previous year, primarily driven by the semiconductor sector.

Chip exports from Seoul soared by 169.4 percent year-on-year, reaching an all-time monthly high of $37.2 billion in May. This marks the third consecutive month where chip exports surpassed the $30 billion threshold. Specifically, exports of DRAM and NAND flash memory increased by 369.8 percent and 206.8 percent, respectively.

The revised growth forecast aligns with the outlook from the Bank of Korea and surpasses the 2.5 percent estimate by the Korea Development Institute. According to the Ministry of Finance and Economy, the OECD noted that the chip industry is expected to continue supporting robust exports and domestic investment.

Looking ahead to 2027, the OECD has projected a growth rate of 1.9 percent for South Korea, slightly down by 0.2 percentage points from its March projection. Regarding inflation, the OECD expects consumer prices in South Korea to rise by 2.6 percent in 2026, a slight decrease by 0.1 percentage points from its previous report. For 2027, the inflation outlook has been adjusted to 2.2 percent, an increase of 0.2 percentage points from the March estimate.

The OECD acknowledged that South Korea's initiatives to cap oil prices and reduce fuel costs have helped alleviate inflationary pressures. However, the organization advised a gradual phase-out of these measures, cautioning that they may contribute to persistent inflationary pressures.

Globally, the OECD has lowered its economic growth outlook by 0.1 percentage points to 2.8 percent, citing challenges posed by rising energy prices and disruptions at the Strait of Hormuz.