The Korea Composite Stock Price Index (KOSPI) advanced for a third consecutive trading day, driven by gains in LG Electronics and financial stocks. The benchmark index closed up 1.0% at 5,354.49 points. Shares of LG Electronics jumped 23%, finishing at 127,900 won.
A state-run research institute revised its growth and inflation forecasts for the year upwards, citing improved domestic consumption and strong semiconductor exports fueled by the artificial intelligence boom. In an economic outlook report released on Wednesday, the Korea Development Institute (KDI) stated it now expects the country's Gross Domestic Product (GDP) to expand by 1.9% in 2026, up from its November forecast of 1.8%. The institute projected economic growth of 1.0% for 2025.
The agency noted, "Looking ahead, despite U.S. tariff hikes and a delayed recovery in construction investment, the South Korean economy is expected to post moderate growth, supported by robust semiconductor exports and a rebound in consumption." It added, "Real income is improving and driving the consumption recovery, influenced by the cumulative effects of interest rate cuts."
KDI now anticipates the average consumer inflation rate for 2026 will be 2.1%, unchanged from the previous year but higher than its earlier projection of 2.0%. The institute indicated that this year's GDP growth rate is forecast to be at the high end of the 1% range, which would exceed the mid-1% range estimate for the country's potential growth rate.
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