Foreign investment banks raise South Korea 2026 growth forecast to 3.5%
In short
Eight major overseas investment banks now expect South Korea's economy to grow 3.5% in 2026 on average, up 0.2 percentage points from a month earlier, according to the International Finance Center. All eight forecast growth of at least 3%, and six of them also raised their 2027 forecasts, lifting the average for next year to 2.8%. JP Morgan is the most bullish, at 4.0%.
Read the full story 2 min read
Major overseas investment banks have raised their forecasts for South Korea's economic growth, with the average 2026 projection from eight institutions reaching 3.5%, up 0.2 percentage points from a month earlier, according to the International Finance Center. Yonhap and Kyunghyang Shinmun both reported the figure. [ 2 , 3 ]
The revisions extend a six-month run of upgrades that began from an average of 2.4% in April. All eight banks now expect growth of 3% or more this year. The number of banks forecasting 3%-plus growth rose from three at the end of June to six at the end of July and eight at the end of September. [ 2 , 3 ]
Among the named institutions, JP Morgan was the most optimistic, raising its 2026 forecast to 4.0% from 3.8% at the end of August and offering the only 4% call. UBS lifted its projection to 3.5% from 2.8%, Bank of America to 3.6% from 3.1% and Citi to 3.8% from 3.7%, the two outlets reported. The OECD also raised its 2026 forecast for South Korea last month, to 3.7%, an increase of 1.1 percentage points. [ 2 , 3 ]
The banks extended their upgrades into next year. Six of the eight raised their 2027 forecasts, lifting the average to 2.8% from 2.5% at the end of August, bringing it close to the Bank of Korea's 2.9% projection. Both outlets attributed the improved outlook to growing expectations that the semiconductor export boom will continue. [ 2 , 3 ]
Forecasts for the current-account surplus also moved up, with the surplus expected to widen faster than nominal GDP. The eight banks' average projection for the surplus as a share of GDP was 17.5% for 2026, up 1.5 percentage points from 16.0% a month earlier, and 17.4% for 2027, up 2.4 percentage points from 15.0%. [ 2 , 3 ]
Kukmin Ilbo also covered the revisions in a headline saying overseas investment banks had again raised their outlook for the Korean economy. No article text from that outlet was available. [ 1 ]
Why it matters
The upgrades reflect expectations that the semiconductor export boom will continue, a key driver for a trade-dependent economy. Higher growth and current-account surplus forecasts could shape how investors and policymakers view Korean assets, though the projections are the banks' own and remain estimates.
Key facts
- The average 2026 real GDP growth forecast from eight major overseas investment banks was 3.5%, up 0.2 percentage points from 3.3% a month earlier. [ 2 , 3 ]
- The banks have raised their forecasts for six consecutive months, from 2.4% in April. [ 2 , 3 ]
- All eight banks expect growth of 3% or more this year, up from three banks at the end of June and six at the end of July. [ 2 , 3 ]
- JP Morgan forecast 4.0%, the only projection in the 4% range, raised from 3.8% at the end of August. [ 2 , 3 ]
- UBS raised its forecast to 3.5% from 2.8%, Bank of America to 3.6% from 3.1% and Citi to 3.8% from 3.7%. [ 2 , 3 ]
- The OECD last month raised its 2026 growth forecast for South Korea to 3.7%, 1.1 percentage points higher. [ 2 , 3 ]
- The average 2027 growth forecast rose to 2.8% from 2.5% at the end of August, approaching the Bank of Korea's 2.9%. [ 2 , 3 ]
- The average forecast for the current-account surplus as a share of GDP was 17.5% for 2026 and 17.4% for 2027, both revised up. [ 2 , 3 ]
Confirmed by several sources
- Eight major overseas investment banks averaged a 3.5% growth forecast for South Korea's economy in 2026, up 0.2 percentage points from a month earlier, according to the International Finance Center. [ 2 , 3 ]
- The banks have now raised their growth forecasts for six straight months, starting from 2.4% in April. [ 2 , 3 ]
- All eight banks expect growth of 3% or more this year. [ 2 , 3 ]
- JP Morgan's 4.0% forecast is the highest among the banks and the only one in the 4% range. [ 2 , 3 ]
- The OECD raised its 2026 forecast for South Korea to 3.7%, an increase of 1.1 percentage points. [ 2 , 3 ]
- Six of the eight banks raised their 2027 forecasts, bringing the average to 2.8%, close to the Bank of Korea's 2.9% projection. [ 2 , 3 ]
Still unclear
- Only four of the eight investment banks are named in the documents: JP Morgan, UBS, Bank of America and Citi. The identities of the other four banks are not given.
- No outlet reports whether any bank lowered its forecast, or gives the range of the individual projections beyond the named institutions. Only upward revisions and the average are reported.
- Kukmin Ilbo's coverage is available only as a headline with no article text. The article body could not be read, so no details from it can be used.
What local media are saying
Timeline, local time
- Kukmin Ilbo publishes a headline saying overseas investment banks have again raised South Korea's growth outlook. [ 1 ]
- Yonhap reports, citing the International Finance Center, that the eight banks' average 2026 growth forecast rose to 3.5% and that JP Morgan proposed 4%. [ 2 ]
- Kyunghyang Shinmun reports the same 3.5% average and the details of the individual upward revisions. [ 3 ]