Major global investment banks have revised their forecasts for South Korea’s economic growth, attributing the increase to the upswing in the global semiconductor industry. According to a report by the Korea Center for International Finance (KCIF), the average growth forecast by eight major global investment banks for Asia’s fourth-largest economy is now at 2.1 percent, up by 0.1 percentage point from the previous month. This outlook surpasses the Bank of Korea’s projection of 1.8 percent and the Seoul government’s forecast of 2 percent.
Among the investment banks, Citi raised its forecast to 2.4 percent from 2.2 percent, while UBS upped its projection to 2.2 percent from 2 percent. Nomura maintained its forecast at 2.3 percent, with Barclays and Bank of America keeping theirs unchanged at 2.1 percent and 1.9 percent, respectively. JP Morgan and HSBC also retained their outlooks at 2 percent and 1.8 percent, respectively. However, Goldman Sachs decreased its forecast to 1.8 percent from 1.9 percent.
There is optimism that the global semiconductor cycle will remain robust, although concerns exist regarding challenges for non-tech industries due to the United States’ tariff policies. In a separate development, the industry ministry of South Korea announced plans to allocate 464.5 billion won (US$317.6 million) to support the automotive sector this year. This initiative aims to enhance the local industry’s competitiveness in advanced technologies like autonomous driving, following a record high in auto exports last year despite U.S. tariff impacts.
