Foreign investment banks have slashed South Korea’s growth outlook for this year, citing unabating market jitters over the eurozone debt crisis, data showed Monday.

The average economic growth for Asia’s fourth-largest economy reached 3.4 percent as of end-December last year, down from the 4.5 percent they projected at the end of January in 2011, according to the data by the Korea Center for International Finance.

The figure is 0.3 percentage points lower than the government’s growth outlook announced late last year.

Of the nine IBs, UBS had the most negative growth outlook of 1.9 percent, a big cut from 3.8 percent in early 2011. Nomura, Morgan Stanley and BNP Paribas predicted 3.0 percent, 3.2 percent and 3.3 percent growth, respectively, all below the average.

The remaining five gave a slightly higher figure in the range of 3.4-3.6 percent.

The IBs’ outlook cut came as the troubled eurozone still has not found a way out of the debt crisis, which will likely continue to overshadow the rest of the global financial market, the KCIF said.

The 207.5 billion-euro debts maturing in Italy and Greece in the first quarter will be another test for momentum, it said.

The foreign IBs estimated the Korean economy to have expanded 3.6 percent last year, while predicting an average of 4.2 percent for 2013.

They expect the United States and Japan to grow 2 percent and 1.6 percent each this year, with the growth projection for China slashed to 8.3 percent due to global uncertainties.

Meanwhile, South Korea’s consumer prices will likely gain an average 3.1 percent this year, according to their forecasts. 

(Yonhap News)