Seoul: Major global investment banks have increased their projections for South Korea's economic growth in 2025, attributing the change to a recent tariff agreement with the United States.
According to Yonhap News Agency, as of the end of July, eight prominent global investment banks, including Barclays, BoA-Merrill Lynch, and Citi, forecasted that South Korea's economy would grow by 1 percent in 2025. This represents a 0.1 percentage point increase from their median forecast a month earlier, as reported by the Korea Center for International Finance. This marks the second consecutive month that foreign institutions have revised their forecasts upward.
Goldman Sachs and UBS provided the most optimistic growth forecasts at 1.2 percent, followed by Barclays at 1.1 percent and Nomura at 1 percent. Goldman Sachs highlighted that the agreement between Seoul and Washington regarding the U.S. administration's tariff policies has reduced uncertainties, placing South Korea in a more favorable position compared to other countries.
Last week, South Korea and the U.S. announced a tariff agreement in which the U.S. will impose a 15 percent tariff on South Korean imports, reduced from the initially threatened 25 percent. In return, South Korea has pledged to invest $350 billion in the U.S.
In May, the Bank of Korea significantly lowered its 2025 economic growth forecast to 0.8 percent due to uncertainties related to U.S. tariff policies and weak domestic demand. The central bank plans to release an updated outlook later this month.