Major global investment banks (IBs) maintained their revised-up growth outlook for South Korea’s economy, a report showed Sunday, despite a gloomier outlook recently portrayed by the country’s central bank.
In June, nine global investment banks forecast the South Korean economy to contract 0.4 percent from a year earlier in 2020, unchanged from their estimate tallied in May, according to the report from the Korea Center for International Finance (KCIF).
In May, the nine investment banks revised up their growth outlook from a 0.9 percent contraction for Asia’s fourth-largest economy forecast the month before, according to the KCIF.
The nine investment banks are Barclays, Bank of America Merrill Lynch, Citi, Credit Suisse, Goldman Sachs, JP Morgan, HSBC, Nomura and UBS.
In the latest poll, the nine IBs revised down their average growth outlooks for five Asian countries, including India, Indonesia and the Philippines, while revising up growth projections for three — Taiwan, Thailand and Vietnam — and keeping intact those for South Korea and Singapore.
The steady outlook for South Korea, however, comes amid an apparently imminent downward revision by the Bank of Korea (BOK).
The BOK in late May forecast the local economy to shrink 0.2 percent on-year, a sharp slowdown from a 2.1 percent expansion forecast three months earlier.
BOK Gov. Lee Ju-yeol last week said a further downward revision may be inevitable due to a recent global resurgence of new coronavirus infections.
“Global economic uncertainties have again increased due to the recent resurgence of COVID-19 cases. Our economic growth may further slow down due to a delay in the recovery of exports that is closely linked to global economic conditions,” he told a press briefing on Thursday when he and six other members of the BOK monetary policy board voted unanimously to keep the country’s policy rate frozen at 0.5 percent.
The top central banker noted the local economy still required support against the growing fallout from the COVID-19 pandemic but that there may be little the BOK can do.
South Korea’s exports have dropped from a year earlier for four consecutive months since March, plunging 24.5 percent and 23.7 percent on-year in April and May, respectively. They again fell 10.9 percent on-year in June.
The BOK is set to offer its latest growth projection next month. (Yonhap)