On the 10th, the Bank of Korea's monetary policy committee (hereinafter the Monetary Policy Board) forecast that Korea's economic growth rate will fall below 2% this year and that the inflation rate could rise to the mid-2% range.
The Monetary Policy Board stated accordingly in its statement on the direction of currency policy released after unanimously keeping the benchmark interest rate at 2.5% annually by the seven board members, including Governor Rhee Chang-yong.
The Monetary Policy Board said, "Despite strong semiconductor exports and a supplementary budget, growth has slowed more than initially expected due to higher energy prices and supply disruptions," adding, "This year's growth rate is expected to fall below the February forecast (2%)."
On prices, it assessed, "Although upward pressure will increase significantly due to higher international oil prices, the government's price stabilization measures will partially mitigate this, pushing inflation to the mid- to upper-2% range." It added, "This year's consumer price inflation will exceed the February forecast (2.2%) by a considerable margin, and core inflation (excluding energy and food) will also be somewhat higher than the initial projection (2.1%)."
On the future direction of the benchmark rate decision, it said, "We will support the recovery of growth while closely examining changes in domestic and external policy conditions, the resulting price trends, and financial stability, and will make decisions accordingly."