South Korea’s Q2 Economy Recovers with Stable 2% Inflation, Rising Household Credit, Elevated Seoul Home Prices, and Trade Talks Uncertainty

South Korea's economy showed signs of recovery in the second quarter of 2025, with the Bank of Korea Governor Rhee Chang Yong noting ongoing uncertainties related to US trade negotiations with major economies. Inflation is expected to remain stable around 2%, and the central bank plans to monitor economic and inflation trends carefully to guide future policy decisions. The Bank of Korea also reported that household credit increased to 1,952.8 trillion won by the end of June, marking the fastest year-on-year growth since June 2022. Quarterly household credit growth accelerated to 1.3% from 0.1% in March, while year-on-year growth rose to 3.0% from 2.4%. Additionally, home prices remain elevated in certain parts of Seoul. South Korean Finance Minister Koo emphasized the government's commitment to stable management of the foreign exchange market amid recent volatility.