Foreign investment banks lowered the average of their economic growth rate forecasts for Korea down to below 3%.
According to the Korea Center for International Finance, the average of the estimated GDP growth rates given by 10 major foreign investment banks is 2.9% as of the end of January, 0.1 percentage point down from a month earlier. Experts are saying that the downward adjustment reflects the less-than-expected growth rate, 0.4% up quarter on quarter, recorded in the last three months of 2012.
The average figure had amounted to 4.3% as recently as early last year. However, it dipped below 4% in June and 3% last month. Only four out of the 10 banks estimated Korea’s GDP growth rate for this year at 3% or higher, including Morgan Stanley at 3.7% and Barclays at 3.3%. Meanwhile, Nomura and Deutsche Bank came up with a figure of 2.5% and the Bank of America’s and JP Morgan’s estimates were 2.6% and 2.8%, respectively.
The Bank of Korea is forecasting that the growth rate will be at 2.8% while the government and the OECD are estimating it at 3.0% and 3.1% each. The percentage given by the LG Economic Research Institute, Hyundai Research Institute and Korea Institute of Finance is 3.4%, 3.1% and 2.8%, respectively.