Hyun-Song Shin: Samsung bonuses could add inflation pressure... will respond firmly to won weakness

[The Financial News] Bank of Korea Governor Hyun-Song Shin said that larger bonuses tied to the improvement in the semiconductor industry could add pressure to consumer prices.
At a press briefing after the Monetary Policy Board meeting on the 28th, Shin said, "If wages raise demand by increasing purchasing power, that will create inflationary pressure."
He said the recent semiconductor boom is driving both wage increases and expanded facility investment, adding that spillover effects are being felt across the broader economy. In particular, he noted, "Since bonuses are also subject to income tax, there will be spillover effects from that as well," and predicted that "this will become fully visible next year."
On the decision to raise this year's growth forecast to 2.6 percent, he said, "This may not be just a temporary trend, but something that could continue for quite some time," underscoring his view that the economy is improving.
He also reaffirmed a firm stance on the won. Shin said, "We will not tolerate one-sided moves in the exchange rate," adding, "We have the tools, the will, and a range of options, so we will respond if necessary."
imne@fnnews.com Hong Ye-ji Reporter