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Banks (Finance)

Global Investment Banks Raise Korea's 2025 Economic Growth Forecast

Strategic Insights

— 1 min read

Global investment banks, including JP Morgan and Goldman Sachs, have revised their forecasts for Korea's economic growth in 2025, citing improving economic indicators and fiscal stimulus. The banks' revised forecasts range from 0.6% to 1.2%, driven by strong exports and a rebound in manufacturing. Despite a partial slowdown anticipated in the third quarter, fiscal stimulus is expected to act as a buffer, leading to revised growth forecasts. The Bank of Korea (BOK) may also raise its growth outlook in the upcoming revised economic forecast scheduled for August 28.

Key Takeaways:

  • JP Morgan revised its 2025 growth forecast upward by 0.2 percentage points, raising its projection from 0.5 percent to 0.7 percent.
  • Goldman Sachs raised its growth forecast for Korea from 1.1 percent to 1.2 percent, reflecting the outcome of recent tariff negotiations between Korea and the U.S.
  • The average 2025 growth forecast by eight major global investment banks stood at 0.9 percent as of the end of last month.
  • The Bank of Korea may raise its growth outlook in the upcoming revised economic forecast scheduled for August 28.
  • The outcome of tariff negotiations with the U.S. aligns with the BOK's May projections, with the estimated average tariff rate expected to be around 13.4 percent by year-end.
  • Korea's central bank estimated the average tariff rate could rise to as high as 14.9 percent by year-end.
  • The 2025 growth forecast still falls below the country's estimated potential growth rate of 1.8 percent.

Statistics:

  • JP Morgan's revised 2025 growth forecast: 0.7 percent.
  • Goldman Sachs' revised 2025 growth forecast: 1.2 percent.
  • Average 2025 growth forecast by major global investment banks: 0.9 percent as of the end of last month.
  • Estimated average tariff rate by year-end: 13.4 percent.
  • Korea's estimated potential growth rate: 1.8 percent.
  • First supplementary budget contribution to GDP: 0.1 percentage point.
  • Second supplementary budget contribution to GDP: 0.1 percentage point.

Sources:

  • In May, the Bank of Korea projected annual growth of 0.8 percent for 2025.
  • Bloomberg (JP Morgan's report on Korean GDP announcement on July 24).
  • BusinessKorea (Goldman Sachs' report on July 25).
  • Korea Center for International Finance (average 2025 growth forecast by major global investment banks as of the end of last month).
  • Bank of Korea (May projections and revised economic forecast scheduled for August 28).

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