OECD: "Low Growth Continues, but Corporate Investment Rebounds... Focus on AI and Cloud"

OECD Economic Policy Survey for the First Half of the Year
60% Say "Recession Will Continue This Year"
"Companies Are Adapting to High-Cost Structures"

The Organisation for Economic Co-operation and Development (OECD) has forecast that the low-growth phase will continue in the first half of this year, but as fears of a sharp economic downturn have eased, corporate investment is expected to expand compared to the second half of last year.

The OECD Business and Industry Advisory Committee (BIAC) released its '2025 Economic Policy Survey' report on January 21, which contains the economic outlook for member countries' business organizations for the first half of 2026. BIAC includes business organizations from 38 countries, including the Korea Enterprises Federation, and 29 of these organizations, representing 93.5% of OECD member countries' gross domestic product (GDP), responded to this survey.

A majority (59.6%) of the OECD business community responded that they expect 'continued recession' in the first half of this year, while only 0.6% cited 'sharp contraction,' a sharp decrease from 49.5% in the second half of last year. This indicates that concerns over a steep economic downturn have subsided. However, most respondents still described the business environment as 'moderate' (57.3%), maintaining a cautious outlook.

This is interpreted as a result of trade, commerce, and geopolitical shocks being recognized as not only short-term risks but also as mid- to long-term costs. In fact, throughout last year, trade shocks such as U.S. tariff measures showed signs of easing uncertainty depending on negotiations by industry and country. Energy prices, which had surged due to geopolitical risks, also showed a downward trend thanks to increased production by non-OPEC countries. BIAC commented, "Companies are adapting to the high-cost structure caused by uncertainty in the business environment and are building resilience."

Whereas the OECD was concerned about 'decreased investment' (74.9%) in the second half of last year, this has dramatically reversed to 'increased investment' (78.1%) for the first half of this year, indicating a significant turnaround in investment sentiment. In particular, the majority (94.2%) expect increased investment in artificial intelligence (AI), cloud, and software, suggesting a concentration of investment in strategic sectors. However, a majority (51.6%) of business organizations in member countries expect inflation to rise this year, raising concerns that cost pressures could constrain investment.

This outlook is consistent with the OECD's assessment that the main downside risks to the global economy this year are the resurgence of inflationary pressures, increased financial market volatility, and worsening fiscal conditions, while productivity improvements from AI investment are seen as a limited upside factor.

When asked about constraints on business activities (multiple responses allowed), 'geopolitical risks' (85%) topped the list, followed by 'high energy prices and supply instability' (81.6%), 'labor market tightness and mismatch' (78.5%), and 'trade and investment barriers' (74.4%). In particular, responses related to energy supply and the labor market increased more than threefold compared to the previous survey. 'Regulatory burden' was also cited as a constraint by 34.5% of respondents, indicating that improving the domestic institutional environment is just as urgent as addressing external conditions.

Reflecting this perception, the top priority for economic growth has shifted from 'trade liberalization' in the previous survey to 'securing energy accessibility' (88.4%), while the importance of 'increasing labor market participation' (65%) has also more than tripled compared to the previous survey (19%). This suggests that, amid a prolonged recession, securing stable energy supplies and expanding the workforce to meet industrial demand will be key factors determining future growth potential.

In particular, the OECD has pointed out that Korea's economic growth is being hampered by a declining workforce due to low birth rates and an aging population, as well as a low labor force participation rate, and has emphasized the need for vocational education and retraining tailored to labor market demand.

BIAC stated regarding the survey, "With global corporate activity shrinking due to external trade and financial constraints and geopolitical risks, low growth is becoming prolonged. We expect the OECD to play an active role in fostering an environment that promotes trade and investment, and in coordinating global regulations, alongside each country's efforts at structural reform."

Kim Bongman, Head of the International Division at the Korea Enterprises Federation, pointed out, "The most notable finding of this survey is that, even amid a global low-growth trend, corporate investment-especially in innovation sectors-has shown a clear rebound." He added, "To translate this demand for investment in innovative sectors into tangible results, bold regulatory reforms, workforce expansion tailored to labor market needs, and securing stable energy sources are crucial. Now is the time for the public and private sectors in Korea to work together to secure a competitive edge in the international arena."