[Weekly Outlook] Focus on Base Rate Hike Decision... Q4 Household Trends Announcement

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, and Lee Ju-yeol, Governor of the Bank of Korea, are attending the 'Expanded Macroeconomic and Financial Meeting' held on the 11th at the Bankers' Hall in Jung-gu, Seoul.

[Asia Economy Sejong=Reporter Dongwoo Lee] Next week, the Bank of Korea's Monetary Policy Committee will decide the base interest rate, and household statistics that can gauge changes in household income and expenditure in the fourth quarter of last year will be released.

The Monetary Policy Committee will discuss whether to adjust the base interest rate at the monetary policy direction meeting on the 24th. Attention is focused on whether the base rate will be raised following increases in November last year and January this year.

In the market, the outlook that the Monetary Policy Committee will keep the base interest rate unchanged at this meeting is somewhat dominant. This analysis reflects concerns about economic deterioration due to the record-high number of COVID-19 cases and the burden of three consecutive rate hikes. However, there are also many opinions that the Monetary Policy Committee will raise the base interest rate to respond to inflationary pressures caused by rising oil prices.

Earlier, on the 22nd and 23rd, the Bank of Korea will consecutively announce the results of the February Consumer Sentiment Survey and the Business Survey Index (BSI).

The Consumer Confidence Index (CCSI) for January rebounded by 0.6 points in one month, but the spread of the COVID-19 Omicron variant may have worsened consumers' perceived economic conditions again. Regarding corporate sentiment, service sectors improved ahead of the Lunar New Year in January, but manufacturing worsened due to rising logistics costs. Attention will be paid to how oil prices and other factors affected the Business Survey Index (BSI) in February.

On the 23rd, Statistics Korea will release the '2021 Birth and Death Statistics.' This is an indicator that shows the natural population change last year by subtracting deaths from births. In 2020, South Korea's population naturally decreased by 33,000 for the first time. Due to the impact of the COVID-19 pandemic and other factors, the birth rate has further declined, so the decreasing trend is expected to have intensified.

Following that, Statistics Korea will also release the results of the '4th Quarter Household Trends Survey' on the 24th. Household trends are statistics that examine the living conditions such as income and expenditure by household. In the third quarter of last year, the average monthly income of households with one or more members nationwide (including agricultural, forestry, and fishery households) was 4,729,000 KRW, an 8.0% increase compared to the same period the previous year. This was the largest increase since Statistics Korea began compiling statistics including single-person households in the first quarter of 2006.

The Financial Services Commission will announce improvement plans for the mandatory holding system for shareholders of newly listed companies. This follows strong controversy over so-called 'eat-and-run' incidents due to stock option sales by Kakao Pay executives, which has increased calls for overall system improvements. To prevent financial exclusion of the elderly amid rapid financial digitalization, guidelines for elderly-friendly mobile financial apps will also be disclosed next week.

This content was produced with the assistance of AI translation services.