Kwon Goo-hoon, senior Asia economist and managing director at Goldman Sachs / Courtesy of Goldman Sachs

The Korean economy is expected to grow 1.8 percent next year, eroded by a worse-than-expected decline in exports and resulting unwinding in investments, a senior economist at Goldman Sachs said Tuesday. The figure was revised from the previous forecast of 2.2 percent.

The country's currency is likely to plunge to 1,450 won against the U.S. dollar through the second half of next year, although a potential uptick in U.S.-bound exports of strategic tech goods previously dominated by China could lead to moderate gains in won, according to Kwon Goo-hoon, senior Asia economist and managing director at the Seoul branch of the global investment bank.

The seemingly visible threat of artificial intelligence (AI) could bolster the country's potential growth to 2.5 percent through a wide breakthrough in labor and business productivity overall, he added.

"The Korean economy faces multiple headwinds next year," Kwon said during a press conference at the bank's headquarters in Seoul.

Underpinning the outlook are a pronounced weakening in exports over the past few months, and subsequent delays and drawdowns in investments. This, in turn, will pose a further drag to the export-reliant economy throughout next year.

Of the 500 basis points reduction from the previous 2.2 percent, Kwon said, about 300 basis points were ascribed to the exports and investments considerations.

"Almost all economies except Taiwan registered a clear sign of plateau or downtrend in the month-on-month figures over the past few months. Also at play is a bleaker-than-expected outlook due to the combination of said factors."

The sustained strengthening of the U.S. reserve currency is likely to continue for the time being, but not to the extent that Korean currency is pushed in sync with the Chinese or Japanese currency, in his view.

"The global reign of strong U.S. dollar may overshoot market expectations. However, Korea has the largest net foreign asset holdings among emerging economies, after Taiwan and Israel. The country's foreign assets constitute about half of GDP, sufficient to provide a floor for the currency in the event of external shocks."

The incoming Trump administration's tariff policy, scheduled for January, could weaken the yuan, depreciating the Korean won to a degree, in his view.

"The general view is that the Chinese currency and other Asian currencies will move in sync. However, the currency coupling will not be pronounced as much compared to 10 or five years ago."

The risk of labor shortage can be mitigated significantly by AI technologies, a boon for Korea, defined by the world's lowest birthrates and super rapid aging, in his view.

The early and full adoption of AI will thus push up the country's potential growth to 2.5 percent, a far rosier outlook than the Bank of Korea's forecast of 2 percent.

"India, Indonesia and Vietnam, for example, have many young workers and therefore do not find the AI technology particularly attractive. However, AI can help Korea with a rapidly diminishing workforce, strengthening the country's productivity at large," he noted.

The BOK will cut the key rate in January next year, and further cuts will leave it at 2.25 percent throughout the year, down from the current 3.25 percent, in his view.

"October cut was hawkish. The pace of further easing will be determined in part by how much the central bank's next year growth forecast will be revised to: 2 percent or lower."