{"id":83735,"date":"2026-07-12T22:17:15","date_gmt":"2026-07-12T22:17:15","guid":{"rendered":"https:\/\/www.europesays.com\/korea\/83735\/"},"modified":"2026-07-12T22:17:15","modified_gmt":"2026-07-12T22:17:15","slug":"rate-hike-certain-this-month-two-hikes-seen-for-year-survey","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/korea\/83735\/","title":{"rendered":"Rate Hike Certain This Month, Two Hikes Seen for Year: Survey"},"content":{"rendered":"

\"BankBank of Korea Governor Shin Hyun-song answers a lawmaker’s question at the second plenary session of the Finance, Economy and Planning Committee held at the National Assembly on the 9th. Yonhap News\"null<\/p>\n

Experts unanimously forecast that the Bank of Korea (BOK) will raise its base rate by 0.25 percentage point at its Monetary Policy Board meeting on the 16th. Most expect this hike to be followed by one additional increase within the year, though opinions differed on the timing of the second move.<\/p>\n

In the “Sedaily Monetary Policy Board Survey” conducted by Seoul Economic Daily on the 12th among 20 domestic economics and business professors and financial-sector experts, all respondents projected that the base rate would rise 0.25 percentage point at this meeting. If the decision matches expectations, it would mark the first rate increase in three years and six months, since January 2023 (from 3.25% to 3.50% per annum).<\/p>\n

Experts assessed that a rate hike is unavoidable, given that the economic recovery continues, led by semiconductors, while inflation remains above target and the won’s weakness and overheating in the Seoul metropolitan property market persist.<\/p>\n

“With semiconductors driving an economic rebound, inflation is exceeding the target, and the high exchange rate and surging home prices are also continuing, so there is no reason not to raise rates,” said Kwak No-sun, professor of economics at Sogang University.<\/p>\n

“With growth and inflation paths expected in the mid-to-high 2% range, consumers’ one-year-ahead expected inflation stood at a high 2.8% as of June,” said Ahn Jae-kyun, research fellow at Korea Investment & Securities. “To stabilize inflation expectations, now is the right time for a rate hike.”<\/p>\n

“Although international oil prices fell faster than expected, inflation is likely to continue running around 3% through August,” said Cho Yong-gu, analyst at Shinyoung Securities. “Considering economic recovery and financial stability, this rate hike is unavoidable.”<\/p>\n

Most experts viewed this hike as the start of a tightening cycle and put a high probability on an additional increase within the year. Some 80% of respondents (16 people) expected the base rate to rise once more within the year following July. In contrast, three respondents (15%) said the tightening would end with this single hike, while one expert (5%) forecast two additional hikes within the year.<\/p>\n

“With intermittent clashes continuing between the United States and Iran, there is a possibility that upward pressure on oil and raw material prices will persist,” said Han Joon-hee, senior research fellow at NH Financial Research Institute. “After preemptively raising rates in July, the BOK is likely to proceed with an additional hike in the fourth quarter while monitoring the inflation trend.”<\/p>\n

Views were split on the timing of the additional hike. Asked about the possibility of a “July big step (0.5 percentage point hike) or consecutive hikes in July and August,” five respondents (25%) said such a scenario was possible.<\/p>\n

“With dollar supply from SK hynix’s listing of American depositary receipts (ADRs), downward pressure on the won-dollar exchange rate is expected to increase,” said Lee Nam-gang, economist at Korea Investment Holdings. “Back-to-back hikes could further enhance the effects of exchange-rate stability and inflation containment.”<\/p>\n

Yang Joon-suk, professor of economics at Catholic University, also said, “To control household debt and property prices, a single rate hike has its limits.”<\/p>\n

On the U.S. Federal Reserve’s rate path for the year, the outlook for a hold was dominant. Some 60% of respondents (12 people) expected rates to be maintained at the current level. Five respondents (25%) predicted “one hike,” one (5%) “two hikes,” and two (10%) “one cut.”<\/p>\n

Lee Nam-gang, the economist who forecast one additional hike within the year, said, “Even if the Iran war moves toward an end, demand pressure from expanded AI investment is strong, so core inflation could remain at a high level. As inflation expectations are also affected by this, one additional rate hike will take place around year-end.”<\/p>\n

Experts put Korea’s real gross domestic product (GDP) growth forecast for this year at an average of 2.76%. That is 0.23 percentage point higher than in the May survey (2.53%). Some experts projected growth reaching 3% to 3.7%.<\/p>\n

The forecast for this year’s consumer price index (CPI) growth averaged 2.85%, up 0.16 percentage point from the May survey (2.69%).<\/p>\n

“Volatility in international oil prices stemming from the U.S.-Iran conflict is likely to persist, and an increase in the money supply from Samsung Electronics’ performance bonus payments could also have an impact,” said Choi Nam-jin, professor of economics and finance at Wonkwang University. “This year’s inflation will continue to run above the Bank of Korea’s 2% target.”<\/p>\n

\u25c7 Survey participants (in Korean alphabetical order)<\/p>\n

Kang Kyung-hoon, professor of business administration at Dongguk University; Kang Sung-jin, professor of economics at Korea University; Kong Dong-rak, analyst at Daishin Securities; Kwak No-sun, professor of economics at Sogang University; Kim Sung-soo, analyst at Hanwha Investment & Securities; Kim Yu-mi, analyst at Kiwoom Securities; Park Sang-hyun, analyst at iM Securities; Park Suk-gil, head at JPMorgan Chase Bank; Park Jong-hoon, chief economist at Standard Chartered Bank Korea; Shin Kwan-ho, professor of economics at Korea University; Ahn Jae-kyun, research fellow at Korea Investment & Securities; Yang Joon-suk, professor of economics at Catholic University; Yoon Yeo-sam, analyst at Meritz Securities; Lee Nam-gang, economist at Korea Investment Holdings; Lee Jae-hyung, analyst at Yuanta Securities; Lee Jun-seo, professor of business administration at Dongguk University; Jung Yong-taek, managing director at IBK Investment & Securities; Cho Yong-gu, analyst at Shinyoung Securities; Choi Nam-jin, professor of economics and finance at Wonkwang University; Han Joon-hee, senior research fellow at NH Financial Research Institute; Heo In, professor of economics at Catholic University.<\/p>\n

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