Global investment banks estimate Korea’s economic growth will average 1.9 percent next year, down from the 2 percent projected in June, according to the Korea Center for International Finance on Monday.

Eight investment banks, including JP Morgan and HSBC, made the forecast in late July.

Goldman Sachs projected 2.6 percent of growth, followed by Barclays at 2.3 percent and Bank of America Merrill Lynch at 2.2 percent. The remaining five banks projected growth in the 1 percent range, with the lowest estimate of 1.5 percent by Nomura.

Of the 10 countries studied, including Singapore, Vietnam, the Philippines and Malaysia, Korea was the only nation where the banks projected the growth to dip below 2 percent in 2024.

The banks forecast Korea’s economic growth to be 1.1 percent this year.

“Inflationary pressure is expected to ease, but China’s slow growth could limit the recovery of neighboring countries’ exports and production,” said Baek Jin-gyu from the Korea Center for International Finance in the report released on Aug. 3. “Damage caused by an abnormal climate, like El Niño, could spread.”

If Korea reports growth in the 1 percent range for two consecutive years, it will be the first since relevant data was compiled in 1954.

There were only two times when growth fell below 1 percent since 2000. The first was following the global financial crisis in 2009 with growth at 0.8 percent, and in 2020, a year of the pandemic outbreak, at negative 0.7 percent.

The outlook according to the investment banks diverges from the Korean government.

Ministry of Economy and Finance projected growth of 2.4 percent next year in its outlook last month, while the Bank of Korea has projected 2.3 percent for 2024 in its May outlook.

Despite the slower-than-expected recovery in China, the ministry removed the word “downward” to describe the Korean economy in the report released in early August, a month after it wrote that “downward risks had eased” in July.

It cited falling inflation and improving employment and production.

Consumer prices grew 2.3 percent on year last month, the lowest rate in 25 months, driven by lower oil prices. It was the second straight month the rate has stayed at the 2 percent level.

The employment rate in July was 63.2 percent, a record high for the month, while the unemployment rate stood at 2.7 percent.

The investment banks projected China’s economic growth for this year to average 5.1 percent and 4.6 percent next year, due to weak momentum and the withering property market.

China’s non-manufacturing activity in July slowed to its weakest this year, while woes spread in the property market as Country Garden Holdings, one of the largest Chinese developers by revenue, missed interest payments on a $22.5 million in bonds that were due on Aug. 6.

BY JIN MIN-JI [jin.minji@joongang.co.kr]