South Korea's Central Bank May Hike Rates Consecutively in October-November, Barclays Warns

According to Barclays economist Son Beom-gi in a report released today (July 13), market participants are preparing for the risk of consecutive rate hikes by South Korea's central bank in the fourth quarter. While the Bank of Korea is not expected to signal back-to-back increases this week, the concern could materialize in October and November if second and third-quarter economic indicators exceed forecasts and the government announces an expansionary fiscal package in late August. Son noted that if Q2 GDP growth surprises upside and core inflation accelerates, the central bank may view itself as behind the curve and respond with aggressive rate increases. The release of next year's budget plan, including details on allocating semiconductor windfall tax revenue, will provide critical information for the central bank's fiscal impact assessment.
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