Investment banks raise Korea's 2021 growth outlook to 3.8%

Major global investment banks (IBs) have again upgraded their outlook for Korea's 2021 economic growth amid growing hopes of a recovery, a report showed Tuesday.

As of the end of March, nine major global IBs, including Barclays, BoA-Merrill Lynch and Citi, forecast Asia's fourth-largest economy to grow 3.8 percent this year, up 0.2 percentage point from their median outlook a month earlier, according to the report by the Korea Center for International Finance.

It represents the fourth straight month of outlook upgrades by those foreign institutions.

In December, they raised their median outlook by 0.1 percentage point to 3.4 percent and hiked their average forecast to 3.5 percent in January.
Those IBs also upped their projection by 0.2 percentage point in February.

Yet their latest outlook for Korea was the second worst after Thailand (3.2 percent) among 10 Asian economies, with India, Taiwan, Singapore, Indonesia, Malaysia, Hong Kong, the Philippines and Vietnam being the other countries.

Out of the 10 nations, foreign IBs have upgraded their outlooks for Korea, India, Taiwan and Singapore, while revising down their forecasts for Indonesia, the Philippines and Vietnam. They have retained their outlooks for Hong Kong, Malaysia and Thailand.

Among the foreign IBs, UBS has offered the highest growth projection of 4.8 percent for Korea, followed by JP Morgan and Goldman Sachs with 4.1 percent.

Korea's economy is widely expected to gather steam amid a global economic recovery, following a 1 percent contraction in 2020 due to the fallout from the coronavirus pandemic.

Meanwhile, those foreign IBs have projected the Korean economy to expand 3 percent in 2022, the same outlook offered a month earlier.

Yonhap