The South Korean Central Bank raised the rate to 1.25%

As a consequence of the meeting of the South Korean Central Bank, it was decided to raise the key rates by 25 bp. up to 1.25%. It was at this level before the start of the crisis caused by the pandemic. Most of the analysts who took part in the survey expected a rate increase in January against the backdrop of rising inflation. Last year it rose to 2.5%. The national Central Bank predicted an increase in inflation in 2021 to 2.3%, with its aim importance of 2%. The growth rate of consumer prices in the country exceeded the target level for 9 consecutive months. According to the head of the Bank of Korea, Lee Joo-yeol, high inflation is likely to continue this year. According to the forecast of the Central Bank, the country’s gross domestic product grew by 4% in 2021. In 2020, the South Korean economy shrank by 0.9%. If the statistics are in line with the prognosis, then South Korea will record a record economic growth since 2010. As for the forecast for 2022, the Central Bank expects the country’s GDP to grow by 3%.

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Arseny Kudrin

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