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Key Points

Global investment banks have upgraded South Korea's 2025 economic outlook to 1%, marking the second consecutive upward revision. The improved forecast follows a tariff agreement with the US, reducing trade uncertainties. Goldman Sachs and UBS are the most optimistic, projecting 1.2% growth. Meanwhile, the Bank of Korea may update its earlier 0.8% forecast later this month.

Key Points: Global Banks Boost South Korea 2025 Growth Outlook to 1%

  • Eight global banks raise South Korea's 2025 GDP forecast to 1%
  • Goldman Sachs and UBS lead with 1.2% growth projection
  • US-South Korea tariff deal reduces trade uncertainties
  • BOK may revise May's 0.8% forecast later this month
2 min read

Global investment banks raise S. Korea's 2025 growth outlook to 1 pc

Major investment banks revise South Korea's 2025 growth forecast upward to 1%, citing US tariff deal and eased economic uncertainties.

"The agreement between Seoul and Washington has helped ease uncertainties. – Goldman Sachs"

Seoul, Aug 6

Major global investment banks (IBs) have raised their outlook for South Korea's 2025 economic growth, citing its recent tariff deal with the United States, a report showed on Wednesday.

As of end-July, eight major global IBs, including Barclays, BoA-Merrill Lynch and Citi, projected that Asia's fourth-largest economy would expand 1 percent this year, up 0.1 percentage point from their median forecast a month earlier, according to the report by the Korea Center for International Finance.

It marked the second consecutive month of upward revisions by the foreign institutions, reports Yonhap news agency.

Among them, Goldman Sachs and UBS offered the highest growth forecast at 1.2 percent, followed by Barclays with 1.1 percent and Nomura with 1 percent.

Goldman Sachs noted that the agreement between Seoul and Washington on U.S. President Donald Trump's administration's aggressive tariff scheme has helped ease uncertainties, and South Korea is not in a disadvantageous position compared with other countries.

Last week, South Korea and the U.S. announced a tariff deal under which the U.S. will impose a 15 percent tariff on South Korean imports, down from the initially threatened 25 percent, in exchange for South Korea's pledge to invest $350 billion in the U.S.

In May, the Bank of Korea (BOK) sharply lowered its 2025 economic growth forecast to 0.8 percent amid uncertainties stemming from the U.S. tariff policy and weak domestic demand. The central bank plans to release an updated outlook later this month.

South Korean stocks finished nearly unchanged on Wednesday as gains in tourism and retail shares offset losses in semiconductors and pharmaceuticals. The local currency slipped against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) climbed 0.14 point, or 0 percent, to close at 3,198.14.

Trade volume was a little slim at 319.8 million shares worth 10.7 trillion won (US$7.7 billion), with winners outnumbering losers 644 to 236.

- IANS

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Reader Comments

P
Priya S
Only 1% growth forecast? India is projected to grow at 6-7%! Shows how developing economies like ours have more potential despite global headwinds. But we must learn from Korea's tech and manufacturing capabilities.
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Aman W
The tariff negotiations show how smaller economies have to compromise with US demands. India should take note and strengthen domestic manufacturing under Make in India before we face similar pressure. Atmanirbhar Bharat is the need of the hour!
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Sarah B
As someone working in the semiconductor industry, I'm concerned about the losses mentioned in that sector. Many Indian tech companies have partnerships with Korean firms - hope this doesn't affect our supply chains. The global economy is so interconnected these days!
K
Karthik V
While the growth revision is positive, 1% is still very low by Asian standards. Korea needs to diversify beyond semiconductors and automobiles - just like India is trying to move beyond IT services. Both our countries face similar challenges in economic transformation.
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Nisha Z
The $350 billion investment commitment to US seems massive! Wonder how Korea will manage this when their growth is just 1%. India attracts similar FDI without such conditions. Our demographic dividend and domestic market size gives us better bargaining power.

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