Goldman Sachs "KOSPI to Reach 2800 Next Year... GDP Growth at 3.6%"

[Asia Economy Reporter Minji Lee] Global investment bank (IB) Goldman Sachs has set the KOSPI target for next year at the 2800 level. It forecasted South Korea's real gross domestic product (GDP) growth rate at 3.6%.

[Image source=Yonhap News]

According to Goldman Sachs' '2021 Korea and Taiwan Outlook Report' released on the 12th, it is expected that economic activities in South Korea and Taiwan will recover rapidly due to improvements in the COVID-19 situation and easing of trade conflicts.

Goldman Sachs explained, "External demand next year will contribute about 60% to South Korea's GDP growth rate," and "we present a forecast of 3.6%, which is higher than the market's expected estimate of 3.2%."

The report anticipated a rebound in domestic demand as stabilization is achieved through broad policy support. Goldman Sachs also predicted, "With the easing of social distancing and deferred demand, South Korea's private consumption will increase by 3.5% next year."

With the Biden administration, which pursues multilateralism, taking office, uncertainties in regional supply chains are also expected to decrease. Goldman Sachs added, "As China focuses on productivity and the digital economy, demand for South Korean technology products may also increase."

On this day, Goldman Sachs set the KOSPI target index for next year at 2800. It also maintained its existing investment opinion of 'Overweight.' The base interest rate is expected to remain at the current level next year. The timing of interest rate hikes is projected to be in 2022.