ING economists Min Joo Kang and Lynn Song expect the Bank of Korea to leave interest rates unchanged this week but adopt a more hawkish tone. They see updated scatter plots showing one or two rate increases in six months, along with improved GDP and CPI forecasts. Strong chip production and stable activity data are expected to strengthen South Korea’s growth prospects.
BoK remains stable but turns hawkish
“We expect the Bank of Korea to leave interest rates unchanged on Thursday, but we signal a hawkish stance.”
“Scatter charts should show one or two rate increases in six months, with the BoK raising its own GDP and CPI forecasts.”
“At least one board member may vote to increase interest rates at a meeting.”
“Prices are likely to rise soon despite government actions, although the economy appears resistant to energy shocks.”
“We expect robust chip production to boost overall industrial output, even with lower refinery and petrochemical output.”
“Monthly activity data in April should confirm our view.”
(This article was created with the lend a hand of an artificial intelligence tool and has been reviewed by an editor.)
