Excerpt from the statement by the Bank of Korea:
In Korea, the Committee appraises the economic recovery to have continued in line with the trend of growth, as exports continue their trend of increase amid the coexistence of improvements in and sluggishness of domestic-demand related indicators. On the employment front, the scale of increase in the number of persons employed has expanded substantially, in line with increases in the 50-and-above age group and in the service sector.
The Committee expects that the domestic economy will maintain a negative output gap for the time being going forward, although it forecasts that the gap will gradually narrow. The Committee forecasts that inflation will gradually rise, although it will remain low for the time being due largely to a good agricultural crop harvest.
Regarding the housing market, sales prices rose slightly in both Seoul and its surrounding areas and in the rest of the country, while leasehold- deposit prices in both regions continued to increase at paces similar to those during the month before.
In the domestic financial markets, after having risen due mainly to international financial market stability stock prices have fallen back, primarily on increased concerns about economic slowdown in China. The Korean won has fluctuated within a narrow range, after having appreciated owing chiefly to the easing of financial unrest in emerging market countries. Long-term market interest rates have meanwhile moved within a relatively narrow range.
Looking ahead, while paying close attention to developments in and the influences of external risk factors such as shifts in major countries’ monetary policies and geopolitical risk in Eastern Europe, the Committee will conduct monetary policy so as to keep consumer price inflation within the inflation target range over a medium-term horizon while supporting the continued recovery of economic growth.