Seoul, Feb 5 Major global investment banks (IBs) have upgraded their forecasts for South Korea's economic growth this year, citing an upcycle of the global semiconductor industry, a report by a financial organisation said on Thursday.
The average forecast for economic growth of Asia's fourth-largest economy by eight major global investment banks (IBs) stood at 2.1 percent as of end-January, up 0.1 percentage point from their median outlook published a month earlier, according to the report by the Korea Center for International Finance (KCIF).
It is more positive than the Bank of Korea (BOK)'s projection of 1.8 percent and the Seoul government's forecast of 2 percent, reports Yonhap news agency.
Of the IBs, Citi raised its forecast to 2.4 percent from 2.2 percent, while UBS increased its projection to 2.2 percent from 2 percent.
Citi has expected the growth rate of semiconductor exports to more than double to 54 percent in 2026 from last year's 22 percent.
Nomura maintained its forecast at 2.3 percent, while Barclays and Bank of America kept their projections unchanged at 2.1 percent and 1.9 percent, respectively. JP Morgan also left its outlook unchanged at 2 percent, and HSBC at 1.8 percent.
Goldman Sachs, however, lowered its forecast to 1.8 percent from 1.9 percent.
Expectations remain high that the global semiconductor cycle will stay stronger and more resilient than previously anticipated, though some institutions have warned of headwinds facing non-tech industries amid lingering risks from the United States' aggressive tariff policies.
Meanwhile, the industry ministry said it plans to provide up to 464.5 billion won (US$317.6 million) in support for the automotive sector this year to help the local industry secure competitiveness in cutting-edge technologies, such as autonomous driving.
The plan unveiled by the Ministry of Trade, Industry and Resources comes after South Korea's auto exports hit a record high of US$72 billion last year, despite impacts from U.S. tariffs.
Of the total, 382.7 billion won will be invested in the research and development of core auto technologies, including autonomous driving systems, and electronic and hydrogen-powered vehicles.
A public-private alliance on autonomous driving formed last year will lead various projects in self-driving technologies, the ministry said.
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