The South Korean economy is expected to lose steam sharply this year as the eurozone debt turmoil is feared to result in a deeper global economic slump, Nomura said.
In its outlook for South Korea, the global investment bank predicted Asia's fourth-largest economy to expand 3 percent in 2012 from a year earlier, a drastic downgrade from a forecast of 5 percent made at the end of 2010.
Nomura's projection is much lower than the South Korean government's prediction of a 3.7 percent expansion, according to South Korean (Yonhap) News Agency.
"With global economic growth expected to slow to 3.2 percent from 3.7 percent, South Korea will inevitably see its growth slow," Kwon Young-sun, a senior economist at Nomura International, told reporters in Seoul.
The impact from the European sovereign debt crisis and China's weaker growth will likely make a dent in South Korea's exports and domestic demand, he said.