Korea’s economy has rebounded strongly in recent months. However, we don’t expect this to last. Weaker exports, fading fiscal support and the continued downturn in the property market are likely to weigh heavily on growth over the coming months. With financial risks contained and inflation likely to undershoot the central bank’s target, the Bank of Korea is likely to cut rates further. We have added an additional 25bps rate cut to our profile for next year. Our forecast for three more rate cuts this cycle make us more dovish than the consensus.
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