The Korea Center for International Finance (KCIF) released its "Global Economic and Financial Market Outlook for the Second Half of 2026" on June 25, projecting that the global stock market will continue its upward trajectory, spearheaded by artificial intelligence (AI) investments.
According to the report, the global economy is anticipated to stage a moderate recovery in the second half of the year, bolstered by the effects of AI investment, despite persistent headwinds such as supply-side shocks stemming from the Middle East and inflationary pressures. The quarterly growth rate of the global economy is forecast to hit a trough of 2.4% in the second quarter, followed by a rebound to 2.8%–3.0% in the third and fourth quarters.
Global equity markets are likely to sustain their gains, driven by the AI sector, as geopolitical risks in the Middle East show signs of mitigation. However, the report cautions that constraints on upward momentum exist, including a deceleration in earnings growth, the potential for monetary tightening by the Federal Reserve, and concerns regarding overvaluation. These factors are expected to deepen market differentiation across sectors and nations.
Regarding oil prices and inflation, the KCIF anticipates that elevated oil prices will aggravate global inflationary pressures, likely driving interest rates in major economies higher. Furthermore, the persistent strength of the U.S. stock market and increased demand for safe-haven assets are expected to support a sustained bullish trend for the U.S. dollar.
In terms of the sustainability of the AI investment cycle, the report suggests that while investments will continue to expand over the next two to three years, the rate of increase is expected to moderate. Notably, the memory semiconductor sector is projected to experience a structural boom due to robust demand for AI infrastructure and the proliferation of long-term supply contracts.
Regarding the energy market, the report highlights that although the supply crisis has been partially alleviated by the ceasefire agreement between the United States and Iran, variables such as subsequent negotiations, the stabilization of the Strait of Hormuz, and the recovery of production in Gulf nations remain critical. The report further warns that if the flow of oil supply fails to meet expectations in the second half, a combination of peak summer demand and potential supply disruptions could push global oil inventories to perilous levels.
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