A national policy research institution forecasts that both the country’s economy and its exports will grow in the low two percent range next year, saying the incoming Trump administration will bring both positive and negative impacts.

According to the Korea Institute for Industrial Economics and Trade(KIET) in its 2025 economic and industrial outlook, released Monday, South Korea’s exports will grow year-on-year by two-point-two percent, while the domestic economy will grow by two-point-one percent.

KIET said outbound shipments have shown favorable growth, mainly driven by semiconductors, and that the slower on-year growth rate reflects a base effect.

The institution said the global trend toward interest rate cuts and the recovery in the IT industry will benefit exports.

KIET further analyzed that due to increased tariffs during the next Trump administration, South Korea’s exports to the U.S. could decrease by at least eight-point-four percent and as much as 14 percent, leading to a decrease in economic growth of between zero-point-one and zero-point-two percentage point.