The Bank of Korea raised rates on Thursday and sharply lifted GDP forecasts:
2026 to 3.3% from 2.6% (one-off +0.7 percentage point) and 2027 to 2.9% from
2.1% (+0.8 ppt). The bank cited a semiconductor supercycle tied to AI—boosting
exports, investment and private consumption—as a key driver of the upgrades.
Inflation forecasts were unchanged at 2.7% for 2026 and 2.3% for 2027. The
package signals a clear shift in the Bank of Korea’s view: growth is stronger
than previously judged, and policy should be tightened to contain potential
inflation and financial-stability risks rather than eased.
