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Korea’s growth slows, but policymakers will focus on inflation

Today’s Q2 GDP data from Korea confirm that the economy grew at a slower pace in the second quarter than it did in the first. Nonetheless, we believe that Korea’s policymakers will continue to focus on tackling inflation even at the expense of slow growth in the near term. Accordingly, we still expect the Bank of Korea (BoK) to hike its policy rate by 25bp to 3.5% in August or September.

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