HSBC: AI’s Direct Inflationary Impact More Likely in South Korea

Odaily News: HSBC economists stated in a research report that AI could have a more direct inflationary impact on South Korea, which serves as an upstream hardware supplier. They noted that bottlenecks in high-tech components and logistics are pushing up producer prices in these key upstream markets. They added that the Bank of Korea may have to tighten monetary policy to address inflation. HSBC expects the Bank of Korea to raise interest rates once more by the end of this year. They further added that there is an upside risk of further policy tightening in 2027, depending on how much the surge in AI exports transmits to local economic activity. (Jin Shi)