KTB mkt view

headline CPI should stay near 2% next year while growth improves into the low 2% range as exports, especially semis and autos, remain solid. there’s limited fiscal or monetary stimulus in play, it’s more about the GDP gap gradually closing rather than overheating.

property remains the main swing factor. supply measures are limited and existing loan curbs have largely lost effect, so a mild upward trend in prices will likely continue. after the April election, the government could tweak property taxes targeting high end (>KRW 3bn) apartments, which might trigger a short lived correction but limited in scale. considering the lag between implementation (around July) and impact, BoK has little reason to move early.

overall setup points to stable inflation, slightly stronger growth, and 2 ways scenarios in property. BoK likely stays on hold throughout 2025, focusing on how property policy transmits to the broader economy.

from a rates perspective, 3y KTB around 2.8–2.9% looks attractive for longs. any near-term hike pricing feels premature — similar to early-24 US or 23 AUS when temporary hawkish repricing turned out to mark the local lows. any rate hike talk probably becomes relevant only into mid-26+.