The Bank of Korea lifted its medium-term economic projections, saying it now expects South Korea’s economy to expand 0.9% in 2025, up from the 0.8% it forecast in May, and to grow 1.6% in 2026. Consumer-price inflation is projected to run at 2.0% next year and 1.9% in 2026, each estimate 0.1 percentage point higher than the central bank’s previous outlook. The policy board left its benchmark rate unchanged, with one member voting against the decision. Governor Rhee Chang-yong told reporters the bank will maintain an easing bias but will proceed cautiously, warning that faster cuts could stoke housing prices and household debt. He added that the four cuts already delivered are expected to add about 0.24 percentage point to growth. Rhee said the bank remains vigilant about foreign-exchange volatility and the risk that the U.S. 145% tariff on Chinese goods will increasingly weigh on Korean exports. While domestic demand is recovering, uncertainty surrounding global trade negotiations, political frictions and potential fiscal stimulus continues to cloud the outlook. The governor stressed that monetary policy independence is intact and that the BOK is working with the finance ministry and regulators on measures ranging from property-market stability to the oversight of stablecoins.