AI TRENDS | HSBC Says AI's Direct Inflation Impact Is More Likely in South Korea

According to Jin10, HSBC economists said AI may have a more direct inflation impact on South Korea as an upstream hardware supplier. They said bottlenecks in high-tech components and logistics are pushing up producer prices in these key upstream markets, and the Bank of Korea may need to tighten monetary policy to address inflation. HSBC expects the Bank of Korea to raise rates once more by the end of this year and said there are further upside risks to tightening in 2027, depending on the degree to which surging AI exports pass through to local economic activity.