South Korea is heading into the next two years with a brighter economic outlook, as major global investment banks see stronger growth taking hold. Their latest projections point to steady momentum through 2025 and 2026, supported by resilient exports and an improving external balance.
Updated forecasts compiled by Korean financial authorities show that eight major international banks now expect The country’s economy to expand about 1.9% in both 2025 and 2026. That marks a slight improvement from estimates a month earlier and reflects a more optimistic view compared with the Bank of Korea, which has maintained a 1.6% projection and is expected to offer revised guidance later this month.
Exports drive upgrades
Citi led the upward revisions, lifting its growth forecast to 2.2%, while JPMorgan and Goldman Sachs share the same outlook. Other large institutions, including Nomura, UBS, Barclays and Bank of America, offered more modest projections but still anticipate continued gains.
The upgrades are rooted in confidence that exports will remain solid, especially in semiconductors and automobile shipments, sectors that have helped anchor the country’s recovery even as global trade faces pressure from shifting tariffs.
An improved external balance adds to the positive tone. Banks now expect the current account surplus to reach roughly 5.3% of GDP next year, reflecting stronger overseas demand and healthier trade flows. Earlier forecasts had placed that figure slightly lower.
Long-term tech push
Alongside the private-sector optimism, the government is preparing a long-term push to support new technologies. Officials have outlined a 10-year plan worth more than 300 billion won to encourage research and development in areas seen as having strong commercial promise.
The Ministry of Trade, Industry, and Resources said it will identify key fields and offer financial support for extended project periods in an effort to ease pressure on companies tackling riskier innovation.
