KIC Discusses '2025 Economic Outlook' with Domestic Investors Entering London Market

29th London International Financial Forum... Domestic Investment Experts Gather Locally
BofA "Global Economy to Grow Moderately Next Year... European Inflation Expected to Stabilize at 2%"

The sovereign wealth fund KIC hosted a gathering in London, UK, inviting Korean institutional investors and local investment experts to discuss the outlook for the European economy and bond market next year.

Korea Investment Corporation (KIC) announced on the 26th that it held the 29th "London International Financial Cooperation Council" on the 25th (local time), organized by its London branch.

The meeting was attended by more than 30 representatives from the Korean Embassy in the UK, government and public investment institutions, and private financial companies including securities, banking, and insurance sectors. Sophia Salim, Head of European Interest Rate Strategy at global investment bank Bank of America (BofA), who delivered the keynote presentation, forecasted that the global economy will generally experience moderate growth and achieve a soft landing next year.

However, geopolitical risks such as US-China tensions, fiscal burdens in various countries, high real interest rates, and China's economic slowdown are expected to act as uncertainty factors, causing regional growth to vary somewhat. The US economy is expected to achieve a soft landing, the European economy to show a weak recovery, and the Chinese economy to gradually stabilize.

Additionally, inflation in major countries worldwide is projected to gradually stabilize downward next year, with both the US and Europe recording inflation rates in the 2% range.

Sonali Punhani, a UK economist, forecasted that the UK economy will grow moderately by 1.5% in 2025 and 1.4% in 2026, driven by real income growth and fiscal policy easing.

However, she added that labor market rigidity and inflationary risks require continuous monitoring.

UK inflation is expected to stabilize from 2.6% next year to around 2.0% the following year, and the benchmark interest rate is projected to be cut by 100 basis points and 50 basis points over two years, reaching approximately 3.25% in 2026. Lee Geon-woong, head of KIC’s London branch and organizer of the event, stated, “Amid multiple political, economic, and geopolitical challenges facing Europe, this was a valuable opportunity to discuss next year’s investment environment focusing on economic and interest rate outlooks.”

He added, “Going forward, through the London International Financial Cooperation Council, we will actively strive to enable domestic institutions based in London to discuss the current status and outlook of the economy and investment asset classes together and to cooperate closely.” KIC has overseas branches in global financial hubs including New York and San Francisco in the US, London in the UK, Singapore, and Mumbai in India. Each overseas branch shares investment information with domestic public and private financial institutions operating locally and works to establish mutual cooperation systems.