By Kwanwoo Jun

South Korea's central bank held its base rate steady as widely expected and raised its 2024 economic growth forecast, signaling a delay in its pivot towards policy easing.

The Bank of Korea on Thursday kept its benchmark seven-day repurchase rate unchanged at a 15-year high of 3.50% for an 11th consecutive time amid solid gross domestic product growth and sticky inflation.

All 13 economists surveyed by The Wall Street Journal had expected the bank to stand pat in May. Most economists think that rate cuts, which usually support economic growth, will start only in the final quarter of the year. That view is backed by stronger-than-expected GDP growth in the first quarter, which prompted some economists to push back rate-cut time lines.

The central bank on Thursday revised its 2024 GDP growth forecast for South Korea up to 2.5% from an earlier estimate of 2.1%.

The bank expects headline inflation to average 2.6% for 2024, unchanged from its earlier forecast and still above its 2.0% annual target.

An upbeat growth outlook combined with stubborn inflation may continue to delay the bank's planned policy easing, according to analysts.

Uncertainty around the trajectory of U.S. monetary policy and high household debt in South Korea may also keep the bank from lowering borrowing costs anytime soon, analysts have said.

The bank expects the country's economy to slow gradually next year. It expects GDP to expand 2.1% and inflation to average 2.1% as well.

Write to Kwanwoo Jun at

(END) Dow Jones Newswires

05-22-24 2118ET