Major foreign banks cut growth forecasts for Korea this year

Major foreign banks cut growth forecasts for Korea this year. March. 23, 2012 11:45. libra@donga.com.

Major foreign investment banks are downgrading their growth forecasts for the Korean economy.

According to the Korea Center for International Finance, 10 major investment banks such as Goldman Sachs and Morgan Stanley predicted in late February that Korea will see growth of 3.3 percent this year, or 0.1 percentage point lower than the prediction made in late January.

Foreign investment banks have recently made cuts to their growth forecasts for Korea`s economy. They cut their predictions from 4.4 percent in July last year to 3.9 percent in September the same year.

UBS was the most pessimistic with a projection of 2.1 percent last month. Nomura of Japan has also lowered its forecast to 2.7 percent from 3 percent in the judgment that Korea`s exports and domestic demand will not bounce back this year.

Declines in exports and domestic consumption and a rise in household debt are blamed for the cut in Korea`s economic growth forecasts, according to experts.