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Korea’s economy will likely grow at a sharper-than-expected pace of 2.5 percent this year thanks to strong exports, mainly led by the semiconductor industry, a state-run think tank said Tuesday. The revised projection by the Korea Institute for Industrial Economics & Trade (KIET) represents a 0.6 percentage-point increase from its previous estimate of 1.9 percent growth presented late last year. Despite energy supply volatility caused by the U.S.-Israeli war against Iran, the think tank said it made an upward revision considering a continued increase in exports and investment sparked by the strong performance of the semiconductor and IT sectors, and the government’s expansionary fiscal policy. Korea’s yearly exports will likely reach an all-time high of $924.4 billion in 2026, rising more than 30 percent from last year, on the back of rising demand for semiconductors and ICT products for artificial intelligence (AI) infrastructure, the KIET said. The country’s yearly exports surpassed the $700 billion mark for the first time in 2025. With record exports, the country is expected to enjoy