▲ Bank of Korea Gov. Shin Hyun-song delivers opening remarks at the BOK International Conference in Seoul on June 1, 2026. (Yonhap)

BOK chief-monetary policy

BOK chief says strong growth gives more room to focus on inflation

By Kim Boram

SEOUL, June 1 (Yonhap) -- Bank of Korea (BOK) Gov. Shin Hyun-song said Monday the country's strong economic growth gives the central bank greater room to focus on curbing inflation in monetary policymaking, signaling a hawkish stance.

"The growth is very strong here in Korea," Shin said during a dialogue session with Isabel Schnabel, a member of the Executive Board at the European Central Bank, during the BOK International Conference held in Seoul.

"First-quarter growth is super strong, especially when measured in terms of gross domestic income rather than gross domestic product."

He noted that South Korea's real gross domestic product (GDP) grew 3.6 percent from a year earlier in the first quarter, while real gross domestic income (GDI), which reflects changes in terms of trade, expanded 12.3 percent.

The BOK chief explained that when oil prices rise, GDI typically grows more slowly than GDP because deteriorating terms of trade weigh on the South Korean economy, which highly depends on crude oil imports.

However, in the first quarter, rising energy prices were offset by robust semiconductor exports, helping GDI expand at a faster pace.

"(Strong economic growth) poses fewer impediments to adjusting monetary policy in light of inflation," Shin said, adding that it becomes more difficult for policymakers to weigh trade-offs when weak growth coincides with elevated inflation.

"I think it gives us a lot more leeway to conduct monetary policy, and I think, in a very effective way to address inflation on this occasion," he added.

Last week, the BOK kept its benchmark interest rate unchanged but signaled possible monetary tightening, citing persistent inflation, strong growth and volatile foreign exchange markets.

"I pointed out that if you look at house prices, household debts and exchange rates, all of the indicators are pointing in the same direction," he said, referring to remarks made during a press conference following last week's rate-setting meeting.

"We will also see the very strong semiconductor numbers showing through in the nominal GDP numbers. We will see very, very large growth in nominal GDP."

The BOK will hold its next monetary policy meeting in July.

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