The South Korean economy is projected to expand at the 2-percent range in 2013 from this year, dampened by exhausted global stimulus measures and unabating eurozone debt troubles, foreign investment banks (IBs) said Tuesday.
As of end-November, 10 global IBs, including Nomura and UBS, estimated the growth rate for Asia's fourth-largest economy to average 3 percent for 2013 and 2.3 percent this year, according to their data compiled by the Korea Center for International Finance (KCIF).
Korea marked the slowest on-year growth in the third quarter since 2009, advancing 1.6 percent compared with a 2.3 percent gain the previous three months.
Nomura was the most conservative with a 2.5 percent growth forecast for Korea in 2013, with UBS betting a 2.9 percent expansion, followed by BoA Merrill Lynch at 2.8 percent.
In contrast, five others, including Citigroup and Goldman Sachs, predicted Korea will likely grow more than 3 percent next year.
The KCIF said four out of the 10 tallied IBs revised down their growth projections for Korea in November from a month earlier. The South Korean government expects the economy to grow 2.4 percent this year and 3 percent in 2013.
The dim forecast came on the heels of a growing consensus by economic experts that the eurozone debt crisis will be far from over next year, remaining as a major downside risk that's feared to undermine the overall growth, the KCIF said.
Most IBs have revised down their world growth forecast for next year at an average of 3.1 percent, up from a 2.9 percent on-year gain for the 2012 outlook, citing the persistent eurozone debt doldrums.
"We've used all viable cards to boost growth, so even if the economy recovers next year, it will likely be limited," said Kim Deuk-gap, an economist at Samsung Economic Research Institute.
The IBs said the ailing 17-nation economic bloc will likely log a negative 0.2 percent growth for next year, extending the recession phase.
China is forecast to buck up an annual 8 percent gain for its 2013 growth, on the back of government-led easing measures. The IBs predicted a 1.8 percent expansion for the United States next year, according to the data. (Yonhap News)
