South Korea’s semiconductor- and artificial intelligence-related exports and investment remained strong, but household demand and purchasing power weakened, raising concerns that a K-shaped recovery could become entrenched. The Hyundai Economic Research Institute said in a report released on the 6th that preliminary real GDP growth slowed to 0.6% in the second quarter from 1.8% in the first quarter, with exports up 1.4%. KDI, in its September Monthly Economic Trends released on the 7th, said real wages rose only 0.3% in the first half of the year, limiting consumption. August exports increased 68.7% year on year, with average daily semiconductor exports up 216.1% and computer exports up 431.2%, while facility investment rose 24.9% in July. Semiconductors accounted for about 47.5% of August exports, compared with 25.9% a year earlier. Domestic indicators were weaker: July retail sales fell 2.4% month on month and 0.8% year on year, while average retail-sales growth in June and July was 1.5%, below 3.2% in the first quarter. Services output growth slowed to 3.5% in July from 5.4% in June. Youth employment remained constrained, with employment declining for 45 consecutive months since November 2022 and the seasonally adjusted employment rate for people in their 20s unchanged at 59.1%, while their unemployment rate rose 0.5 percentage points. Consumer prices rose 3.1% in August, and KDI said Middle East instability and U.S. trade-policy uncertainty posed additional risks. The institutes warned that overly tight monetary policy could raise debt-servicing burdens, suppress consumption and contribute to credit crunches, recommending targeted measures alongside macroeconomic stability policies.