Goldman Sachs: The market's expectations for the Bank of Korea to raise interest rates appear to have exaggerated the inflation risks.

Goldman Sachs analysts said that the market's expectation of the Bank of Korea raising policy rates by nearly 100 basis points in the next 12 months seems to exaggerate the inflation risks brought about by the energy shock caused by the Middle East conflict. Analysts led by Goohoon Kwon wrote in a report: "We expect the Bank of Korea to not shift to a tightening stance in the short term, as upward inflation pressure is limited by fuel price caps and nationwide energy conservation measures." Goldman Sachs pointed out that while oil shocks typically exacerbate stagflation risks, in Korea, their impact is more skewed towards growth resistance rather than inflation.