Now it’s time for On Point, where we speak to experts to delve deeper into the biggest news stories in the spotlight right now.
As was roundly expected last Thursday, the Bank of Korea raised the benchmark interest rate by a quarter-of-a-percent to one percent.
Watchers say they expect more rate hikes continuing deep into next year in a bid to stop housing and consumer prices rising so quickly.
South Korea’s central bank says it was left with no other option but to make the call with inflation hitting a high not seen in decade in October, stressing any indecision by them could see inflation spiraling out of control.
But, what about the effects on the economy and households as well as the prospects going forward?
For more, we connect to Professor Oh Joon-seok from Sookmyung Women's University's School of Business.
Good morning Professor, did anything the Bank of Korea say last week surprise you or did you expect some of its remarks about the reasons for the rate hike and the economic outlook?
The ever-increasing wealth gap has always been an issue in South Korea, causing societal tensions for decades. Do you foresee the gap between the rich and poor widening even further in the months and years to come… and what political repercussions could this have?
During last week’s announcement, the central bank also raised its inflation outlook to 2.3 percent for this year and 2 percent for 2022.
Given that the price of everyday goods is going to rise so much over the next year or so, could you envision a scenario in which public firms are ordered to pay their workers more? And does the government have the clout to pressure private-sector businesses to do the same?
Finally, most of South Korea’s macro-economic forecasts look moderately decent, all things considered. While it’s likely to be tough for regular people, what’s your forecast for the country’s growth next year and will exports - particularly major items like semiconductors - continue to recover strongly in 2022?
We appreciate your insights as always. Professor Oh Joon-seok from Sookmyung Women's University's School of Business. Thank you.