Major foreign investment banks cut their forecast of Korean economic growth to the mid-2 percent range for this year on faltering exports, a report showed Monday.

Ten foreign investment banks forecast the Korean economy to grow an average 2.6 percent this year, lower than their previous estimate of 2.9 percent made in July, according to a report by the Korea Center for International Finance.

Their forecast stood in contrast with the central Bank of Korea’s 3 percent growth estimate and the government’s 3.3 percent projection.

The prolonged eurozone debt crisis and China’s slowing economy are blurring the prospects of the export-dependent Korean economy.

Many analysts forecast the Korean economy to grow in the 2-percent range this year.

The Korean economy grew 0.3 percent in the second quarter from three months earlier, a third of the 0.9 percent on-quarter expansion in the first quarter, spawning concerns that the economic momentum is weakening.

In the first half, Asia’s fourth-largest economy grew 2.6 percent from a year earlier. According to the central bank, if the Korean economy meets its 3 percent growth target, the third and fourth quarter growth should reach 1.2 percent.

The Swiss-based UBS revised down its 2012 outlook for the Korean economy to 2.1 percent from 2.9 percent. This can be translated into the second-half growth slowing to around 1.6 percent.

JPMorgan lowered its full-year growth forecast for the South Korean economy to 2.5 percent from 2.9 percent and Deutsche Bank revised down its estimate to 2.6 percent from its earlier forecast of 3 percent, according to the report.

Recent exports data are fueling concerns that the Korean economy may not fare well in the current quarter.

Korea’s outbound shipments fell 6.2 percent on-year in August, compared with an 8.8 percent contraction in July, and posted a 1.5 percent on-year decline during the first eight months.

The slowing growth outlook and easing price pressure are prompting analysts to bet on a rate cut by the country’s central bank on Thursday.

Analysts said the BOK is likely to lower the benchmark 7-day repo rate to 2.75 percent this week to prop up growth. The central bank froze the rate at 3 percent last month after delivering a surprise rate cut in July in a bid to cushion the bitter impacts of the eurozone debt crisis on the Korean economy. (Yonhap News)