How Have Global Investment Banks Upgraded S. Korea's 2026 Growth Forecast?
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Synopsis
South Korea's economic outlook for 2026 has been positively adjusted by leading global investment banks, driven by strong export performance. This report examines the optimistic projections and the government's commitment to innovation in R&D, aiming to lay the groundwork for future growth in the nation.
Key Takeaways
- Global investment banks have raised South Korea's growth forecast for 2026 to 1.9 percent.
- The forecast reflects confidence in the country's export performance.
- The Bank of Korea's estimate currently stands at 1.6 percent.
- The government will invest 302.6 billion won in R&D over the next decade.
- The current account surplus ratio has been revised to 5.3 percent.
Seoul, Nov 6 (NationPress) Notable global investment banks (IBs) have improved their projections for South Korea's economic growth in 2026, attributing this positive change to strong export performance, a report revealed on Thursday.
By the end of October, eight prominent global investment banks (IBs), such as Barclays, Bank of America, and Citi, anticipated that the fourth-largest economy in Asia would grow by 1.9 percent next year, marking an increase of 0.1 percentage point from their median forecast issued a month prior, according to findings from the Korea Center for International Finance (KCIF).
This forecast is more optimistic than the Bank of Korea's (BOK) current estimate of 1.6 percent growth for 2026. The central bank is expected to unveil a revised outlook later this month, as reported by Yonhap news agency.
Among the banks, Citi has upgraded its forecast to 2.2 percent from 1.6 percent, while JP Morgan and Goldman Sachs also predict a growth rate of 2.2 percent for South Korea next year.
Nomura has projected a 1.9 percent expansion, with UBS forecasting 1.8 percent, Barclays at 1.7 percent, and Bank of America at 1.6 percent, according to the KCIF.
The investment banks expect South Korea's exports to remain robust next year, contributing to the economic growth following this year's impressive performance.
Additionally, the institutions have revised their forecasts for the country's current account surplus as a percentage of gross domestic product (GDP) for 2026, increasing it to 5.3 percent from a previous estimate of 4.7 percent, as indicated in the report.
Meanwhile, the government plans to invest a total of 302.6 billion won (approximately US$209 million) over the next decade into innovation-driven research and development (R&D) projects with substantial commercialization potential, as stated by the industry ministry.
This initiative aims to alleviate the burden on private enterprises in developing high-risk, high-potential technologies that could redefine future industries, according to the Ministry of Trade, Industry and Resources.
To achieve this, the ministry will identify 10 areas with potential to become future growth engines and offer up to 25 billion won for a maximum duration of eight years per project.
Point of View
The recent upgrades in South Korea's economic growth outlook by global investment banks highlight a positive trend that is crucial for the nation's future. With a focus on innovation and R&D, it is essential for South Korea to maintain this momentum to ensure sustainable growth and global competitiveness.
NationPress
06/11/2025
Frequently Asked Questions
What factors contributed to the increase in growth outlook for South Korea?
The increase in growth outlook for South Korea is largely attributed to strong export performance, as highlighted by major global investment banks.
What is the revised growth forecast for South Korea in 2026?
The revised growth forecast for South Korea in 2026 is 1.9 percent, as projected by leading global investment banks.
How does this forecast compare to the Bank of Korea's projection?
This forecast is more optimistic than the Bank of Korea's current projection of 1.6 percent growth for 2026.
What plans does the government have for innovation in R&D?
The government plans to invest 302.6 billion won over the next decade into innovation-focused R&D projects with high commercialization potential.
What is the expected current account surplus ratio for 2026?
The expected current account surplus ratio to GDP for 2026 has been raised to 5.3 percent from a previous estimate of 4.7 percent.
