#South Korea Economy

The Bank of Korea (BOK) has outlined its 2026 monetary policy, stating that any further interest rate cuts will depend on a careful assessment of inflation, growth, and financial stability.

A new study found that manufacturing wages in South Korea are now 27.8% higher than in Japan, fueling concerns that soaring labor costs unmatched by productivity are eroding its global competitiveness.

Major investment banks have lifted South Korea's 2026 inflation forecast to 2.0%, citing the persistently weak won. With the currency nearing 1,500 per dollar, import costs are rising, posing a dilemma for the Bank of Korea.

South Korea's franchise sales hit $81 billion in 2024, but growth slowed to 6.8%, the lowest since the pandemic, signaling economic headwinds and sluggish job creation.

A South Korean official stated the country's 2026 investment in the U.S. will likely be 'much smaller' than the $20 billion cap, a move to calm markets as the won hits a 16-year low.

The Bank of Korea cut its benchmark interest rate by 25 basis points to 3.25%, the first reduction in over three years, as it shifts its focus from inflation to supporting economic growth.

South Korea's self-employed over 60 now hold $263 billion in loans, largely tied to real estate. A Bank of Korea report warns this poses a growing risk to financial stability and non-bank lenders.