Global banks raise South Korea's 2026 growth forecast to 3.2%, above Bank of Korea's 2.6%

Major global investment banks have raised their South Korea growth forecasts for a fourth consecutive month, as stronger-than-expected second-quarter output and sustained gains in semiconductor-led exports and the current account surplus bolster the case for annual growth topping 3%.

The average real GDP growth forecast for South Korea this year from eight major investment banks stood at 3.2% as of late last month, up 0.2 percentage points from 3.0% at the end of June, according to the Korea Center for International Finance. The average forecast has risen for four consecutive months since April, when it stood at 2.4%.

Six of the eight banks projected South Korea's economy would grow 3% or more this year. JPMorgan offered the highest forecast at 3.8%, followed by Citi at 3.7% and HSBC at 3.4%. Barclays and Goldman Sachs each projected 3.2%.

The upward revisions were driven in part by second-quarter growth that came in well above expectations. Real GDP expanded 0.6% quarter-on-quarter in the second quarter, far exceeding the Bank of Korea's forecast of 0.2%.

Strong exports and current account data have also lifted growth expectations. South Korea's cumulative current account surplus for the first half of this year reached $191.01 billion, 26.1% above the Bank of Korea's earlier projection for the period. Merchandise exports in June surpassed $100 billion for the first time in history, with non-IT sectors such as steel contributing alongside semiconductors.

Analysts say the Bank of Korea is now likely to raise its annual growth forecast from 2.6% to above 3% when it releases its revised economic outlook on Aug. 27.