Global investment banks upgrade S. Korea's 2025 growth outlook

Meanwhile in a rather promising turn of events global investment banks have raised their growth projections for South Korea this year.

Our correspondent Moon Ji-young has more.

Major global investment banks are raising their forecasts for South Korea's real GDP growth this year.

According to the Korea Center for International Finance, the average 2025 growth forecast for South Korea among eight major global investment banks stood at point-9 percent as of the end of July.

Notably, JP Morgan, which had previously held the most pessimistic view on the Korean economy, has significantly upgraded its economic growth forecast by point-2 percentage points to point-7 percent in just two months.

Following the Bank of Korea's second-quarter GDP announcement last month, JP Morgan assessed that Q2 GDP growth slightly exceeded market expectations, driven by strong exports and an increase in manufacturing.

Goldman Sachs also raised its growth forecast by point-1 percentage point to 1-point-2 percent, reflecting the outcomes of Korea's tariff negotiations with the U.S.

In its August 1 report, the bank noted that the deal with the U.S. reduces uncertainties regarding tariffs on specific items such as semiconductors, adding that Korea is not at a disadvantage compared to other countries.

Regarding whether the Bank of Korea will also raise its forecast in its revised economic outlook this coming August, an expert noted that:

"While the uncertainty from the tariff negotiations is easing, potentially improving our exports, it's still unlikely that these agreements will drastically raise the economic growth forecast. Nevertheless, it will probably be slightly better than the 0.8% we had expected."

The Bank of Korea, in its May forecast, projected this year's annual growth rate at point-8 percent and anticipated that the supplementary budget would boost the rate by point-1 of a percentage point.

Moon Ji-young. Arirang News.