Korean global economic canary dies

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ROK exports are a key real-time barometer of global trade. It just died. Pantheon with the note.

The BoK pressed ahead with its hiking cycle on Thursday, despite the absence of a governor. Governor Lee’s term has ended, and nominee Rhee Chang-yong has not yet had his confirmation hearing. The 25bp hike, to 1.50%, was a unanimous decision, driven by fears of higher inflation for longer, linked to the invasion of Ukraine. But while the Bank’s assessment of the outlook has turned less bullish, we think it still underestimates the threat to growth this year. As headwinds build, we expect the BoK to become more cautious, and limit itself to just one more hike this year.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.