Citigroup: Bank of Korea's Rate Hikes May Accelerate Sooner Than Anticipated

Deep News09:00

Jin-Wook Kim of Citigroup suggests that the Bank of Korea's pace of interest rate increases could be faster than expected, potentially starting as early as July. The economist notes that with fiscal expenditure expected to rise, supported by corporate tax incentives for semiconductor firms, the central bank may enter a tightening cycle longer than previously anticipated. Considering upside risks to both economic growth and inflation, Kim now forecasts four 25-basis-point rate hikes by the end of April 2027, up from the earlier projection of two hikes by the end of October 2026. Citigroup has also revised upward its economic growth forecasts for the country to 3.0% for 2026 and 2.8% for 2027, compared to prior estimates of 2.9% and 2.4%, respectively.

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