AI Boom Sustains South Korea's Growth Amid Global Challenges: IMF Official

In a recent statement, Choi Ji-young, an executive director at the International Monetary Fund (IMF), emphasized that South Korea's economy is demonstrating remarkable resilience despite facing global economic challenges. This resilience is largely attributed to the ongoing boom in artificial intelligence (AI) technology.

During a press conference in Bangkok, Choi noted that while trade tensions and geopolitical conflicts, such as the crises in the Middle East and the ongoing war between Russia and Ukraine, pose significant risks to the global economy, South Korea's growth forecast has been revised upwards. The IMF now projects a growth rate of 3.3% for South Korea in 2026, a notable increase from previous estimates, driven primarily by strong semiconductor exports fueled by AI infrastructure demand.

Choi highlighted that the investment cycle in AI is expected to continue, with substantial investments in AI data centers and related infrastructure. He pointed out that these projects typically take a long time to develop, suggesting that the momentum in AI investment is unlikely to wane in the near future.

However, he also cautioned about potential downsides, including the risk of a stock market correction and adverse effects on businesses if the AI boom falters. Despite these risks, Choi expressed optimism about the long-term prospects of AI investment in South Korea, stating that it has expanded the country's fiscal capacity for future growth initiatives.

Choi advised that countries experiencing economic growth, like South Korea, should prioritize investments in innovation rather than overly focusing on debt-to-GDP ratios. He also commented positively on the government's plans to establish a Future Fund using revenues from the semiconductor sector to lay the groundwork for sustainable growth.