JP Morgan sees upside risk to South Korea rates and expects the Bank of Korea to
hike in Nov, Feb and May to a terminal 3.75%, above economists’ median of 3.5%.
The bank forecasts Korean GDP growth of 3.8% this year and 3.3% next year and
says a semiconductor boom could boost investment, exports, wages and domestic
demand. JP Morgan expects the Bank of Korea to hold rates at 3% on Oct. 22 but
warns stronger domestic demand and persistent core inflation could push the
terminal rate above 3.75%.
