Investment banks see 2-3% growthThe domestic economy is projected to expand within the 2 percent range in 2013, dampened by exhausted global stimulus measures and relentless debt issues in the euro zone, foreign investment banks (IBs) said yesterday.
As of end-November, 10 global IBs, including Nomura and UBS, estimated the growth rate for Asia’s fourth-largest economy would stand at 3 percent for 2013 and 2.3 percent this year, according to data compiled by the Korea Center for International Finance (KCIF).
Korea marked the slowest on-year growth in the third quarter since 2009, advancing 1.6 percent compared with a 2.3 percent gain in the previous three months.
Nomura was the most conservative with a 2.5 percent growth forecast for 2013, with UBS betting on a 2.9 percent expansion, followed by BoA Merrill Lynch at 2.8 percent.
Five others, including Citigroup and Goldman Sachs, predicted Korea would likely grow more than 3 percent next year.
The KCIF said four out of the 10 tallied IBs revised down their growth projections for Korea in November from a month earlier. The government expects the economy to grow 2.4 percent this year and 3 percent in 2013.
The dim forecast came on the heels of a growing consensus by economic experts that the euro zone debt crisis will be far from over next year, posing a major downside risk that’s feared to undermine overall growth, the KCIF said. Most IBs revised downward their world growth forecast for next year, with the average now standing at 3.1 percent, up from a 2.9 percent on-year gain for 2012.
“We’ve used all viable cards to boost growth, so even if the economy recovers next year, it will likely be limited,” said Kim Deuk-gap, an economist at Samsung Economic Research Institute.
The IBs said the ailing 17-nation economic bloc will likely log a negative 0.2 percent growth for next year, extending the recession.
China is forecast to grow by 8 percent in 2013.