Major foreign investment banks and institutions have revised their economic growth outlook for South Korea, data showed Tuesday. 

According to the Korea Center for International Finance, nine foreign investment banks -- Barclays, Bank of America Merrill Lynch, Citibank, Credit Suisse, Goldman Sachs, JP Morgan, HSBC, Nomura and UBS -- forecast that the local economy will contract by 0.4 percent this year on average, slightly improved from the minus 0.9 percent growth estimated in late April. 

The banks also raised the country’s economic growth outlook for next year from 3.1 percent to 3.2 percent in the same period. 

Among the 10 Asian countries surveyed by the investment banks, Korea was the only one with an elevated economic growth outlook.

While Nomura raised its forecast to a contraction of 0.5 percent for the Korean economy, sharply less severe than the 5.9 percent contraction forecast in April, Bank of America Merrill Lynch slashed its outlook to minus 0.2 percent, a fall from its earlier estimate of 0.2 percent growth.  

Meanwhile, the Organization for Economic Cooperation and Development predicted that Korea’s economy could shrink by 1.2 percent this year as the global economy will face its worst downturn since World War II due to the COVID-19 crisis. 

The global economy is expected to shrink 6 percent this year, the OECD said.

By Choi Jae-hee (cjh@heraldcorp.com)