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South Korea: Exports and inflation support rate hike path – DBS

DBS Group Research’s Ma Tieying expects South Korea’s June exports to remain very strong, with year-on-year growth around 50–60% and the trade surplus widening above USD30bn. AI-related semiconductor demand and higher memory prices are seen offsetting energy imports. Headline and core CPI are forecast to rise further, and the Bank of Korea is projected to deliver two 25bps rate hikes by 4Q.

Exports strength and CPI upside

“June trade and inflation data will be the key focus ahead.”

“Exports are expected to maintain strong growth of 50-60% yoy for the fourth consecutive month, based on the preliminary data for the first 20 days of June, which showed a 60.4% yoy increase.”

“The trade surplus is expected to widen to above USD30bn, compared with USD27bn in the previous month.”

“AI-driven demand and rising memory chip prices continue to support South Korea’s semiconductor exports, helping to offset higher energy import costs.”

“On the inflation front, headline CPI is expected to accelerate further to 3.4% yoy from 3.1% in the previous month, remaining above the 3% threshold for the second consecutive month.”

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