Sustained export strength led by semiconductors has prompted major global investment banks to repeatedly raise their growth forecasts for South Korea this year, pushing the average above 3 percent for the first time.
According to the Korea Center for International Finance, the average real GDP growth forecast for South Korea this year from eight major investment banks stood at 3 percent as of end-June, up 0.2 percentage points from 2.8 percent at end-May.
It marks the first time the average forecast from major investment banks has reached the 3 percent range. The figure climbed from an average of 2 percent at end-2025 to 2.1 percent at end-January, then rose to 2.4 percent at end-April and 2.8 percent at end-May. Three consecutive monthly upgrades through June brought the total increase to 1 percentage point over six months.
Some banks projected growth in the mid-to-upper 3 percent range. JPMorgan made the largest single revision, raising its forecast from 3 percent to 3.7 percent — a 0.7 percentage point increase in a month. Citibank also lifted its outlook from 3 percent to 3.5 percent, projecting growth in the mid-3 percent range.
Barclays (2.6 to 2.7 percent), Goldman Sachs (2.5 to 2.7 percent) and HSBC (2.6 to 2.8 percent) each raised their forecasts by 0.1 to 0.2 percentage points.
Bank of America (3.1 percent), Nomura (2.4 percent) and UBS (2.8 percent) held their forecasts steady from the previous month.
Monthly export revenue broke the $100 billion mark for the first time last month, and continued semiconductor-led export strength has kept growth forecasts rising at major domestic and international institutions.
Some institutions have projected growth as high as the 4 percent range. UK-based Capital Economics recently put South Korea's growth forecast at 4.0 percent in a report, while Korean Reinsurance, a domestic reinsurer, projected 4.1 percent.
The Bank of Korea is now widely expected to raise its annual growth forecast when it releases its revised economic outlook in August. Bank of Korea Governor Shin Hyun-song said at a Korea Finance Association academic conference on June 19 that the annual growth forecast "will be revised upward from 2.6 percent, even on a purely mechanical basis."
The semiconductor export boom is also expected to lift South Korea's current account surplus as a share of nominal GDP this year. The average forecast from the eight investment banks for South Korea's current account balance as a percentage of GDP stood at 14 percent, up 3.2 percentage points from the previous month's 10.8 percent — more than double the end-December forecast of 6.5 percent. Seven of the eight banks raised their current account surplus projections last month, with UBS the only exception, holding its forecast at 4 percent.
HSBC led the revisions, raising its forecast by 7.2 percentage points from 9.8 percent to 17 percent in a single month. Citibank (11.8 to 16.4 percent), Bank of America (15 to 16.1 percent), Nomura (10 to 15.5 percent), Goldman Sachs (12.4 to 15.1 percent), JPMorgan (10.2 to 14.8 percent) and Barclays (12.8 to 13 percent) all projected current account surplus ratios of around 15 percent.
kimstar@heraldcorp.com
