Foreign investment banks predicted South Korea's economy will not be able to achieve 3 percent growth this year, according to a report released Thursday by a South Korean institute.

Nine foreign investment banks, including Goldman Sachs, Nomura and Barclays, said that Asia's fourth-largest economy could grow by 2.8 percent on average, according to the Korea Center for International Finance. The center -- set up under the auspices of the South Korean government and the Bank of Korea -- closely monitors movements taking place on the international financial market and makes policy proposals to the government.

The outlook came just days after the International Monetary Fund revised South Korea's growth forecast upward to 3 percent, citing the recovery in global trade and China's import demand.

Meanwhile, LG Economic Research Institute said it has revised down South Korea's growth forecast to 2.8 percent from its previous estimate of 2.9 percent, citing a lack of signs of economic recovery.

In July, South Korea raised its target growth to 3 percent from 2.6 percent, on the basis of export-led growth.

Outbound shipments came to $55.1 billion in September, up from $40.8 billion a year earlier, according to data from the South Korean government.

The country's exports have been on a steady rise since November, led by an upturn in oil prices and recovering global trade. September marked the ninth month in a row that exports grew by double digits.

Some officials and analysts say risks related to North Korea and a diplomatic row with China could weigh on the South Korean economy.

China -- South Korea's largest trading partner -- has carried out a series of economic retaliations against Seoul in protest at the deployment of an advanced US defense system in South Korea.

LGERI also said it expects the Bank of Korea to raise its key rate in the first half of next year.

In August, the central bank kept its policy rate at an all-time low of 1.25 percent, though it has said that it may take a monetary tightening stance if the economy shows signs of robust recovery, a comment widely seen as signaling a rate hike over the long haul. (Yonhap)