The Korea Economic Research Institute under the Federation of Korean Industries on June 13 raised its projection for domestic economic growth this year from 2% to 2.4%. Shown are containers on the afternoon of April 1 waiting to be shipped at the Port of Busan.

By Israa Mohamed

A Seoul-based think tank says it raised its growth forecast this year for the domestic economy from 2% to 2.4% thanks to strong exports. 

The Korea Economic Research Institute (KERI) under the Federation of Korean Industries on June 13 reported the revised projection.

In March, a KERI report on economic trends and outlook in the first quarter set the growth forecast at 2%. The institute raised it to 2.4% thanks to strong export results backed by improvements in the global economy.

The country's exports will grow 5% this year, KERI said, thanks to recovery in leading economies and higher demand for information and communications technology led by artificial intelligence (AI). More overseas shipments of semiconductors due to stronger demand for AI will be a major driver of better export performance overall.

Yet the report predicted that the lingering business slowdown in China, Korea's largest export market, and the potential for the war in the Middle East to expand could apply downward pressure on the Korean economy.

KERI also expected delayed recovery in domestic consumption until the trends of the weak KRW and high oil prices ease and if the prime interest rate is cut.

ess8@korea.kr