JPMorgan Sees Higher Interest Rates in South Korea Amid Semiconductor Boom

JPMorgan Chase & Co. is sticking to its forecast that the Bank of Korea will raise interest rates in November and again in February and May next year, taking the benchmark rate to 3.75%. This is above the median forecast in Bloomberg's survey of economists.

The Wall Street lender expects South Korea's economy to expand 3.8% this year and 3.3% next year, with JPMorgan economist Seok Gil Park predicting that the BOK will raise its growth outlook again when it releases updated forecasts in November.

Park notes that a key uncertainty is how the semiconductor boom will filter through the broader economy, with its impact already evident in business investment but much less clear in household consumption.