South Korea's AI-driven rebound still leaves household purchasing power constrained

In its latest monthly assessment, the Korea Development Institute warned that South Korea's economic upswing, largely driven by the artificial-intelligence sector, has yet to lift household purchasing power in a meaningful way. The report attributes the shortfall to sluggish underlying wage growth and ongoing supply-side inflationary pressures, including persistently high oil prices. Nevertheless, the institute observes that the overall recovery momentum persists, with manufacturing output expanding steadily.

Exports surged 83.5% in September to a record US$120.9 billion, propelled by a historic rise in semiconductor shipments that topped US$60 billion for the first time. Growth also continued in AI-related equipment investment and related exports such as steel and non-ferrous metals. Despite these macro-economic strengths, the benefits have not yet been broadly felt by consumers.