South Korea’s Central Bank Remains Concerned About Low Inflation
South Korea's central bank said in a quarterly report on monetary policy that it will keep interest rates in its current state (1.5%), as inflation remains low. Annual inflation in South Korea fell to 1.0% in January, which is the lowest level in 17 months. Nevertheless, the bank believes that a sharp improvement in exports and the restoration of investment contribute to the growth of the CPI this year.
The central bank said that the contribution of exports to the gross domestic product is likely to grow, while personal consumption will fall due to the debt burden. In 2016, private consumption accounted for about 46% of GDP. It is expected, that the global demand for South Korean memory chips and petrochemical products will be stable this year.