The Korea Development Institute(KDI) has maintained its 2025 economic growth forecast at zero-point-eight percent, citing a prolonged slump in the construction sector despite stronger consumption and expectations for stimulus under the new government.

In its revised economic outlook, released Tuesday, the state-run think tank warned that growth could weaken further if the United States raises semiconductor tariffs or if global trade tensions intensify.

While major domestic securities firms and international investment banks have recently lifted their forecasts to one percent or above, the KDI kept its estimate unchanged, pointing to sluggish construction investment, now projected to contract eight-point-one percent this year, a three-point-nine percentage point downward revision.

The KDI raised its export growth forecast to two-point-one percent, driven by strong semiconductor demand and preemptive shipments ahead of possible U.S. tariff hikes, though it is still well below last year’s six-point-eight percent.

Private consumption is expected to grow one-point-three percent and facility investment one-point-eight percent, supported by low interest rates and fiscal measures such as consumption coupons and supplementary budgets.

Consumer prices are forecast to rise two percent, with a current account surplus of 106 billion U.S. dollars.

The 2026 growth forecast remains unchanged at one-point-six percent, with U.S. semiconductor tariffs and delays in stabilizing the property project financing market flagged as major downside risks.