FKI News

KERI Projects Korea’s Economic Growth at 1.7% in 2026(1.0% Forecast in 2025)

The Korea Economic Research Institute projected Korea’s economic growth at 1.7% for 2026 in its “KERI Economic Trends and Outlook” report. While this represents a modest rebound from the 1.0% forecast for 2025, it remains below the country’s potential growth rate.
Exports in key industries such as semiconductors and shipbuilding are expected to lead growth in 2026. However, traditional manufacturing sectors face challenges in recovering capital investment due to global oversupply and weakening price competitiveness. Given Korea’s high dependence on exports, shifts in the global trade environment and exchange rate volatility are likely to be key variables for growth. KERI emphasized the need for thorough preparation against external risks, including changes in trade policies in the United States and the European Union, as well as a slowdown in China, for the recovery to evolve into a sustained phase of growth expansion.

Report Highlights Socioeconomic Costs of Socially Withdrawn Youth

According to an FKI report, the socioeconomic cost of socially withdrawn youth in Korea is estimated at KRW 5.3 trillion annually, equivalent to approximately KRW 9.83 million per individual. Among economically inactive youth, those who reported having spent the previous week “resting” without a specific reason were found to be about seven times more likely to become socially withdrawn than employed youth. The risk of isolation also accelerates as the duration of unemployment lengthens. Sang-ho Lee, head of economic affairs at FKI, noted that disconnection from social relationships is a key driver of youth isolation. He emphasized the need for systematic preventive policies that provide work experience opportunities and close monitoring, preempting the “resting” phase that leads to prolonged isolation.

Major Conglomerates Announce Regional Investment Plans

A survey conducted by FKI of 10 major conglomerates, including Samsung, SK and Hyundai Motor, indicates that approximately KRW 270 trillion will be invested in regions outside the Seoul metropolitan area over the next five years. These investments will focus on advanced and strategic industries such as semiconductor facility expansion, battery R&D, AI and carbon neutrality infrastructure. The plans reflect proactive efforts by companies to position regional areas as key growth hubs and to strengthen local industrial ecosystems. If executed as planned, the investments are expected to generate approximately KRW 525 trillion in production inducement effects over five years, providing significant momentum for revitalizing regional economies facing structural challenges.

Business Survey Index (BSI) for March 2026 Announced

The FKI’s Business Survey Index (BSI) for the top 600 companies by revenue showed the index rising to 102.7 this March, surpassing the benchmark level of 100 for the first time in four years. In particular, the outlook for the manufacturing sector increased by 17.8p over the previous month to 105.9, reaching its highest level in four years and ten months.
FKI attributed the improvement in business sentiment to stronger export performance in key industries at the start of the year, as well as a base effect from fewer operating days in February. While most manufacturing sectors, including general machinery, precision equipment, and textiles and apparel, shifted to a positive outlook, non-manufacturing industries remained slightly below the benchmark at 99.4. By category, export expectations reached their highest level in one year and nine months, whereas domestic demand and investment remained below the benchmark, indicating that the recovery in sentiment has not yet spread evenly across all areas.
Sang-ho Lee, head of economic affairs at FKI, noted that business sentiment, which had remained subdued amid prolonged economic slowdown, has undergone a meaningful improvement. He emphasized that to sustain this momentum beyond a short-term rebound, the government and the National Assembly should strengthen institutional support, including with regulatory reforms.

FKI Releases 2025 Report on Corporate Social Value at Major Companies

According to an FKI survey of the top 500 companies by revenue, both the scale and impact of corporate social contribution activities, as well as employee participation, increased across the board in 2024. Average social contribution expenditure per company reached approximately KRW 16.6 billion, marking the highest level since the survey began in 2002. Total spending also exceeded KRW 5.38 trillion, an increase of more than KRW 1 trillion compared to the previous year, indicating a growing trend of companies reinvesting profits into society.
Employee participation also rose significantly, with average annual volunteer hours per employee reaching 5.8, the highest level in the past five years. Newly introduced programs were concentrated among children’s and youth initiatives (24%), followed by community development and environmental protection. Notably, there has been a growing emphasis on strategic approaches that leverage companies’ core competencies and infrastructure to address social challenges. Reflecting this trend, FKI identified “LINC,” which connects local communities, industries and technology, as the key theme for the year. Among sustainability priorities, the social dimension, including safety, health and shared growth, has emerged as a top focus.
As corporate social contribution evolves beyond unilateral support into meaningful partnerships that drive social change, there is a growing need for policy environments that respect corporate autonomy and enable the continued development of such innovative initiatives.