汇丰银行-韩国金融业-bank of korea watch：on hold,but raising 2017 growth forecast-20170707-hsbc.pdfVIP

Flashnote 7 July 2017   Bank of Korea Watch ECONOMICS KOREA On hold, but raising 2017 growth forecast  The BoK is likely to raise its 2017 GDP forecast next week James Lee and may sound more optimistic on growth Economist The Hongkong and Shanghai Banking Corporation Limited james.dh.lee@.hk  The base rate is likely to be unchanged at 1.25%, as widely +852 2822 1647 expected, with no hints of near-term policy action  Slowing growth from 2Q17 and a high level of floating-rate household debt suggest the BoK will be cautious of hiking The Bank of Korea (BoK) is scheduled to meet on 13 July 2017, when the policy rate is widely expected to be kept on hold at 1.25% by market consensus including HSBC. As such, the key focus will turn to the Banks revised economic outlook that the governor will present in the accompanying press conference. With 1Q17 GDP coming in stronger than what BoK forecast in April, the central bank will have to raise its 2017 growth forecast unless it reduces its expectations for the following quarters. The governor already hinted that the forecast could be raised at the June MPC meeting. The BoK is currently forecasting 2017 GDP growth at 2.6%, while the upside surprise in 1Q17 will raise the full year forecast by 0.2ppts. The risks are to the upside, in our view, given the optimistic tone of recent comme