The Korea Development Institute (KDI) said Monday that South Korea’s economy continued to improve in September, led by sectors tied to artificial intelligence investment (AI), as strong semiconductor exports and equipment spending supported manufacturing while gains in household income remained limited. Exports rose 68.7% year on year in August, while equipment investment increased 24.9% in July, with semiconductor manufacturing equipment up 66.0%.

KDI said the expansion had yet to spread fully to household purchasing power, leaving consumption on a slower path. Retail sales fell 0.8% year on year in July, although KDI attributed part of the decline to temporary and