Major global IBs raise Korea’s real GDP growth forecast for 2025

(Yonhap News)

Major global investment banks (IBs) are raising their projections for South Korea’s real gross domestic product (GDP) growth in 2025.

JPMorgan Chase & Co., which had been the most pessimistic about the Korean economy, revised its 2025 growth forecast upward by 0.2 percentage points in just one month.

Financial industry sources said on Wednesday that JPMorgan raised its growth forecast for Korea from 0.5 percent to 0.6 percent on June 30th, and then again to 0.7 percent on July 24th.

JPMorgan noted in a report after the Bank of Korea (BOK) announced the country’s second-quarter GDP figures on July 24th that Korea’s second-quarter GDP growth slightly exceeded market expectations thanks to its robust exports and manufacturing growth.

“While a correction could take place in the third quarter, fiscal stimulus will likely cushion the impact,” the bank said. “We now maintain our second half annualized growth forecast of 1.8 percent and expect full-year growth of 0.7 percent based on the second-quarter performance.”

JPMorgan had the lowest outlook for Korea among eight major global IBs tracked by the Korea Center for International Finance (KCIF) as of late June 2025.

Goldman Sachs & Co. LLC also raised its forecast for Korea by 0.1 percentage point from 1.1 percent to 1.2 percent, reflecting the outcome of recent Korea-U.S. trade negotiations.

In a report released on Friday, Goldman Sachs noted that the announcement of the trade deal reduces uncertainties related to tariffs on specific items such as semiconductors and that Korea’s terms are not particularly disadvantageous compared to other countries.

The company then revised its 2025 and 2026 growth forecasts for Korea by 0.1 percentage points each to 1.2 percent and 2.2 percent respectively.

Goldman Sachs had raised its 2025 forecast for the country from 0.7 percent to 1.1 percent in June, citing reduced U.S. tariff risks, improved growth prospects for the United States and China, and the potential for fiscal stimulus in Korea.

According to the KCIF, the average 2025 growth forecast for Korea among the eight major global IBs stood at 0.9 percent as of the end of July. This average has remained at the current level for two consecutive months after increasing in late June for the first time in 16 months.

While JPMorgan and Goldman Sachs have raised their forecasts, the overall average has not risen further.

The BOK may also revise its outlook for the country upward in its updated economic forecast scheduled for later August. The central bank projected Korea to grow 0.8 percent this year in May and estimated that the government’s second supplementary budget would contribute an additional 0.1 percentage point to GDP growth.

Given that the outcome of tariff negotiations with the United States has been cited as a key variable for growth projections, the agreed-upon mutual tariff rate of 15 percent, which includes automotive products, is seen as broadly consistent with the assumptions used in the BOK’s May forecast.