Citi does not rule out the possibility that the Bank of Korea may raise its key interest rate at the upcoming Monetary Policy Board meeting scheduled for May 28. This scenario is being considered in light of a likely upward revision of the central bank’s economic forecasts for 2026.

The company has updated its forecast for the median policy rate over the next six months, raising it to a range of 2.75–3.00% from the previous 2.50%. Previously, it was expected that the first signal of a potential rate hike could emerge at the May 28 meeting through adjustments to forecasts by members of the Bank of Korea’s board.

The Bank of Korea’s GDP growth forecast for 2026 is also expected to be revised upward to 2.4–2.6% from the previous 2.0%. This adjustment is influenced by strong GDP figures in the first quarter of 2026 and fiscal stimulus measures.

Additionally, the inflation outlook based on the Consumer Price Index (CPI) for 2026 is projected to rise to 2.6–2.8% from the earlier 2.2%. Previous calculations had assumed a Brent crude oil price of $64 per barrel and a negative output gap.

These estimates were published ahead of the Bank of Korea’s upcoming update of its economic forecasts at the next Monetary Policy Board meeting.