Major international investment banks (IB) are raising their forecasts for South Korea's economic growth rate this year. This is attributed to the resolution of uncertainties following the announcement of tariff negotiation results with the United States and the expectation that the government's fiscal expansion will offset the impact of sluggish exports.

According to the International Finance Center on the 6th, major international investment banks have revised their forecasts for South Korea's real Gross Domestic Product (GDP) growth rate this year from an average of 0.9% to 1.0%. JP Morgan, which had the most pessimistic view of the South Korean economy, raised its forecast for South Korea's economic growth rate from 0.5% in April to 0.6% in June, and again to 0.7% last month. Citibank also increased its forecast from 0.6% in April to 0.9% last month. Goldman Sachs similarly adjusted its forecast from 1.1% in May to 1.2% in August.

Of the eight major international investment banks surveyed by the International Finance Center in June, JP Morgan had the lowest forecast. In a report following the Bank of Korea's announcement of the second quarter (April-June) GDP on the 24th of last month, it stated, "The second quarter GDP growth rate slightly exceeded market expectations due to strong exports and manufacturing growth," and analyzed, "While there may be a backlash in the third quarter (July-September), the effects of fiscal stimulus will act as a buffer."

Goldman Sachs also assessed on the 1st that "the announcement of trade negotiations between South Korea and the United States reduces uncertainties related to tariffs on specific items such as semiconductors."

There is speculation that the Bank of Korea may also raise its forecast in its revised economic outlook in August. The Bank of Korea had projected a growth rate of 0.8% for this year in May, anticipating that the second supplementary budget would have the effect of raising this year's growth rate by 0.1 percentage points.

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