Overview

• The Bank of Korea reduced its benchmark interest rate by 25 basis points to 2.75%, the lowest level since August 2022.
• This marks the third rate cut in four monetary policy meetings, reflecting heightened concerns over South Korea's slowing economic growth.
• The central bank revised its 2025 GDP growth forecast downward to 1.5%, citing weak consumption and construction sectors.
• Political uncertainty surrounding the impeachment trial of President Yoon Suk Yeol and trade tensions with the U.S. are exacerbating economic challenges.
• Analysts predict the Bank of Korea may implement additional rate cuts this year, despite risks of rising household debt and property prices.