Global investment banks have forecast 2-3 percent growth for the Korean economy next year, 8 percent growth for China and negative growth for the eurozone.

The recession in the eurozone will continue to weigh on major economies around the world including Korea, while China will continue on the recovery path, they said.

Four of the 10 investment banks that made projections for the Korean economy revised down their outlooks in November compared to October.

Half of the 10 investment banks projected growth in the 2-percent range for Korea as of late last month, while the other half said it is expected to grow over 3 percent in 2013, making an average of 3.0 percent.

They are Nomura Securities (2.5 percent), UBS (2.9 percent), Merrill Lynch (2.8 percent), Deutsche Bank (2.6 percent), BNP Paribas (2.9 percent), Citi (3.4 percent), Goldman Sachs (3.4 percent), JP Morgan (3.2 percent), Morgan Stanley (3.7 percent) and Barclays (3.0 percent).

Six out of 11 investment banks lowered their growth outlooks for the eurozone in November, compared to August, pulling down the average from 0 percent to minus 0.2 percent.

With third-quarter GDP growth posting minus 0.1 percent on-year, the eurozone has officially entered a recession, or two consecutive quarters of GDP contraction.

Nomura and Citi said the eurozone economy is likely to contract by 0.8 percent and 0.7 percent, respectively, worse than this year’s minus 0.4 percent growth.

Debt-ridden European countries have failed to find a fundamental solution to their fiscal problems, and their fiscal tightening has been followed by further weakening of the economy.

The unemployment rate in the eurozone hit 11.7 percent in October, the highest since the launch of the euro. Moody’s axed, by one notch, the long-term credit rating of the EU’s bailout facilities ― the European Stability Mechanism and the European Financial Stability Facility ― last Friday, after downgrading France the week before.

“Since major economies have played all their cards to rev up the global economy, recovery will be limited next year,” said Kim Deuk-gap, head of global research at Samsung Economic Research Institute.

“The persisting European fiscal woes will be the biggest risk, precluding significant growths across the globe.”

The global investment banks expect China to grow 8 percent on average next year, up from this year’s 7.7 percent. China is on a path to recovery, they said, as Beijing cut its key interest rate twice this year and unveiled economic stimulus packages. The incoming leadership of Xi Jinping is also likely to focus on economic recovery.

The investment banks’ average growth outlook for the U.S., however, stood at 1.8 percent, less than this year’s 2.2 percent.

The investment banks forecast a 3.1 percent average growth for the world economy in 2013, up from 2.9 percent this year. Six of the 11 IBs revised down the global outlook in November, compared to August.

By Kim So-hyun (sophie@heraldcorp.com)