Nomura Securities: South Korea's Central Bank to Monitor Economic Recovery Before Tightening

Nomura Securities analyst Park Jeong-woo stated in a report that South Korea's central bank will wait to confirm that interest rate hikes will not disrupt the still fragile domestic economic recovery. According to Jin10, the bank is also seeking evidence of inflationary pressures driven by growth. The report highlights that the spillover effects of the semiconductor supercycle on domestic demand remain limited, maintaining a K-shaped economic growth model. Inflation is primarily driven by the current oil price shock, which supports the central bank's hawkish stance. Nomura noted that conditions for further tightening are not yet mature, as a sustainable recovery in consumption or a rise in inflation expectations has not been confirmed.