Bank of Korea warns: AI-driven prosperity could complicate inflation outlook

Deep Tide TechFlow news, June 17 — The boom in South Korea’s AI-driven semiconductor industry may ultimately make inflation outlooks more complicated, as the central bank warned that large bonuses paid to major technology companies could fuel broader wage increases and stronger consumer demand. In a report released by the Bank of Korea on Wednesday, the central bank said that unusually high bonuses at some chip firms could prompt wage demands in other industries, thereby boosting consumer demand and raising corporate costs.

The central bank said that if wage growth spreads beyond the technology sector, it would, together with rising energy prices, create additional inflation pressure. Although there are currently no signs of a broad-based acceleration in wage growth, the bank cautioned that, as policymakers work to prevent temporary supply shocks from turning into more persistent inflationary pressure, attention should be paid closely to unusually high bonus payouts and steadily rising wage demands. (Jin10)