Major 9 IBs Raise South Korea's Growth Forecast from 3.6% to 3.8%

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[Asia Economy Reporter Eunbyeol Kim] Major global investment banks (IBs) have raised their forecast for South Korea's economic growth rate this year to 3.8%. This figure reflects the faster-than-expected recovery of the global economy, including the United States, due to vaccine distribution and the strong performance of exports.

According to the International Finance Center on the 6th, as of the end of last month, nine overseas IBs including Barclays, Bank of America Merrill Lynch (BoAML), Citi, Credit Suisse, Goldman Sachs, JP Morgan, HSBC, Nomura, and UBS forecast an average real gross domestic product (GDP) growth rate of 3.8% for South Korea this year. This is 0.2 percentage points higher than the forecast compiled at the end of February. The IBs have raised South Korea's growth forecast for four consecutive months since the end of last year.

However, other Asian countries also saw significant increases in their growth forecasts due to the base effect from last year. The IBs raised Taiwan's growth forecast by 0.6 percentage points to 5.3%. Forecasts for India (11.3%, +0.2 percentage points) and Singapore (6.5%, +0.2 percentage points) were also revised upward.

Forecasts for Indonesia (4.5%, -0.1 percentage points), the Philippines (7.1%, -0.2 percentage points), and Vietnam (7.1%, -0.8 percentage points) were downgraded, while growth rates for Hong Kong (4.5%), Malaysia (5.9%), and Thailand (3.2%) remained at last month's levels.

As of the end of March, by IB, UBS raised South Korea's growth forecast by 0.7 percentage points to the highest overall at 4.8%. BoAML (3.9%) raised its forecast by 0.5 percentage points, and Goldman Sachs (4.1%) and Barclays (3.7%) each raised theirs by 0.3 percentage points. JP Morgan (4.1%) raised its forecast by only 0.1 percentage points.

Meanwhile, the global economic growth rate forecast for this year by Barclays, BNP Paribas, BoAML, Citi, Goldman Sachs, JP Morgan, Nomura, Soci?t? G?n?rale, and UBS is 6.2%, up 0.2 percentage points from a month ago. These IBs raised the U.S. growth forecast for this year by 0.7 percentage points to 6.4%. Goldman Sachs explained that it raised the U.S. growth forecast considering large-scale fiscal stimulus and the faster-than-expected pace of vaccine distribution exceeding initial targets.

On the other hand, China's growth forecast for this year (8.5%) was lowered by 0.1 percentage points. Although economic indicators for January and February were favorable, BNP Paribas expects the recovery to slow down due to delays in vaccine distribution and potential credit tightening.

This content was produced with the assistance of AI translation services.