Issue Swing factors for Korea's 2026 outlook: war, energy inflation, the AI cycle and trade uncertainty

Summary

KIET identifies several variables that could push Korea's 2026 outcome away from its central forecast. Externally, the course of geopolitical risk from the Middle East war and the extent to which higher energy prices feed inflation are the first concerns. Whether the AI-driven ICT upswing can be sustained and how shifts in monetary policy move financial markets are also named. Domestically, the durability of the consumption recovery and of strong investment remains uncertain. Overseas trade conditions could also hurt exports to a degree that is hard to gauge in advance. Together these factors define the main uncertainties around the 2.5 percent growth projection.