{"text":[[{"start":8.3,"text":"A surge in semiconductor exports thanks to the AI boom will exceed the hit to South Korea’s economy from the war in Iran and global energy shock, the country’s central bank chief has said."}],[{"start":20.35,"text":"Shin Hyun-song, speaking at the conclusion of his first monetary policy meeting as Bank of Korea governor on Thursday, forecast GDP growth for 2026 would be 0.7 percentage points higher thanks to booming chip sales. That outweighs the bank’s estimated 0.4 percentage-point hit to GDP from the Gulf crisis."}],[{"start":42.05,"text":"South Korea’s economy and stock markets have been buoyed this year by soaring demand for high-bandwidth memory chips used in AI systems. Exports reached $78.5bn in the first quarter, 139 per cent higher than the same period last year, while leading Korean chipmakers Samsung and SK Hynix have passed market capitalisations of $1tn."}],[{"start":66.4,"text":"The Kospi stock market index has also more than tripled in less than 18 months as retail investors seek to share in the industry’s bumper profits."}],[{"start":76.25,"text":"Shin said the stock market boom and a supplementary budget aimed at providing relief from the Iran war shock would boost GDP by 0.1 and 0.2 percentage points, respectively, as the BoK raised its 2026 growth forecast to 2.6 per cent, from 2 per cent."}],[{"start":94.6,"text":"A respected international economist, Shin took over as governor of the Korean central bank last month. He is expected to adopt a more hawkish line than his predecessor Rhee Chang-yong as he grapples with elevated inflation and a won that is at its weakest level against the US dollar since the 2008 global financial crisis."}],[{"start":115.1,"text":"South Korea is also heavily reliant on imported energy, sourcing almost 70 per cent of its oil and 17 per cent of its liquefied natural gas from the Middle East before the war in Iran. "}],[{"start":128.45,"text":"The BoK cited a “high level of uncertainty regarding the development and ripple effects of the Middle East situation” as it held its main policy rate at 2.5 per cent. But it indicated future tightening, with inflation projected to remain above the bank’s 2 per cent target."}],[{"start":145.29999999999998,"text":"Given that “financial stability risks persist”, Shin said, citing “exchange rate volatility, Seoul-area housing prices, and household debt, we judge that it will be necessary to raise the base rate at an appropriate point in the future”."}],[{"start":159.95,"text":"Monetary policymakers raised inflation forecasts for this year to 2.7 per cent, up from a projection of 2.2 per cent in February. The forecast for core inflation — which strips out food and energy prices — rose to 2.4 per cent, up from 2.1 per cent. "}],[{"start":178.85,"text":"Two members of the monetary policy board voted to raise rates to 2.75 per cent, including deputy governor Ryoo Sangdai, who this month said it was “time to consider” increases."}],[{"start":192.25,"text":"The BoK recently introduced a US Federal Reserve-style “dot plot” map, which showed most board members projected rates at either 2.75 or 3 per cent in six months."}],[{"start":202.85,"text":"Ho Woei Chen, an economist at UOB Group, said that inflation should moderate in 2027, meaning that “the BoK would likely not see the need to go beyond two hikes”."}],[{"start":213.79999999999998,"text":"Analysts said that, despite the strength in semiconductors, IT and shipbuilding, other industries such as steel and petrochemicals were struggling in the face of higher oil prices and competition from low-cost Chinese rivals. This raised the prospect of a “K-shaped” divergence that may limit the BoK’s room for manoeuvre. "}],[{"start":233.85,"text":"Korea is also facing domestic pressure including high household debt and youth unemployment, high housing prices in the greater Seoul region and an ageing population that is putting strains on workforce supply. "}],[{"start":246.25,"text":"While “a strong property market, an equity bull market and a weakening currency” would normally suggest tightening, Peter Kim of KB Securities said, “underlying domestic economic conditions reveal weak employment, bifurcated wage growth and polarised fortunes of exporters”."}],[{"start":272.34999999999997,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1779958808_6333.mp3"}