The Importance of Cultural Arts Education in Human Development "Human flourishing is made possible through cultural arts education. It allows individuals to blossom," said Valeria Pica, a researcher from Italy's G. d'Annunzio University, during the international symposium linked to the 2026 UNESCO Cultural Arts Education Week at the National Museum of Modern and Contemporary Art in Seoul on May 21. The symposium, hosted by the Ministry of Culture, Sports and Tourism and the Korea Arts and Culture Education Service, brought together global scholars who unanimously stressed the significance of cultural arts education. Pica introduced the Culture 3.0 paradigm, highlighting the productive role of culture. Culture 3.0 views culture as an active and participatory endeavor, moving beyond Culture 1.0, where experts provide culture to individuals, and Culture 2.0, which symbolizes the popularization and mass production of culture. "In Culture 3.0, the barriers between those who create and those who use culture are broken down," Pica explained. "It signifies that many people participate in creating platforms or redefine themselves through cultural arts, returning to their inherent values." She particularly emphasized 'cultural and artistic subjectivity,' stating, "Culture is not just for the elite or only for special festival periods. Culture and art must become part of everyday life." Pica noted that creativity, innovation, and critical thinking are all achievable through cultural arts education, which fosters a virtuous cycle of professional training and cultural enjoyment when both producers and consumers coexist. She warned that without cultural arts education, not only could the creative economy suffer, but social cohesion could also weaken, asserting that cultural rights, as a foundation for civic participation, are as crucial as human rights. To accurately assess the effects of cultural arts education, Pica advocated for a 'multi-model approach.' She stated, "We should not measure the effects of cultural arts activities solely quantitatively. Evaluation methods must capture effects across cognitive, emotional, social, and developmental dimensions." Anne Bamford, a professor at the University of Sydney who led a survey of 60 countries for UNESCO, advised that arts education must be implemented in school environments to ensure that no child is excluded from cultural arts education. Bamford cautioned that inadequate arts education could diminish children's creativity, stating, "One-third of all arts education has actually harmed children," and noted that overly strict education could lead to a loss of interest, causing children to abandon playing instruments and stifling their creativity. She added that arts education should be systematic and sustained over the long term.* This article has been translated by AI. 2026-05-29 00:10:00

Exploring Cultural Diversity Through Interactive Programs at the National Museum "I am imagination." At the 2026 Cultural Diversity Week event held on May 23 at the National Museum of Korea in Yongsan, 10-year-old Kim Da-ha expressed herself using the word 'imagination.' Using colorful cards in shades of purple, yellow, pink, blue, and green, she created various shapes to represent herself. The experiential program 'Light of Me' was designed to encourage children to reflect on the question, 'Who am I?' Participants created mind maps with words or phrases that described themselves and then used the colored cards to express their inner selves through colors and shapes. Kim said, "I really enjoy playing while imagining things." "Just thinking about becoming a character in a game or Hermione from 'Harry Potter' makes me happy. If there were only one color, it would be boring. My emotions are as diverse as the colors!" Finding Balance Together with Mobiles The 2026 Cultural Diversity Week, hosted by the Ministry of Culture, Sports and Tourism and co-organized by the Korea Arts and Culture Education Service and cultural foundations from Busan, Jeonnam, Chungbuk, and Ansan, adopted the slogan 'When My Culture Shines.' The aim is to broaden the understanding of cultural diversity beyond nationality, ethnicity, gender, and regional issues to include personal experiences and sensitivities. The event conveyed the message that when each member of society's unique stories are respected, it leads to a more creative and inclusive society. The idea is that when 'my culture' shines, new relationships and creative endeavors can blossom. Families flocked to the event, where both children and adults engaged in participatory programs that allowed them to naturally experience diversity. The process involved reflecting on their own inner selves and understanding and respecting the differences of others. In the program 'Future Sensation - Sculpting the Movements of Nature' by Art Center Nabi, children explored the sounds and movements of nature using all five senses. The participants, consisting of elementary school students from grades 3 to 6, walked along the paths of the National Museum of Korea, creating mobiles using various materials such as string, straws, and colored paper to represent the natural elements they sensed, including the ripples of a pond, the fluttering of swallows, and the movements of fire ants. Working in teams of five, the children completed a mobile that swayed in different directions based on weight, creating a colorful wave. Remembering their teacher's words, "Don't say, 'You broke the balance,'" they experienced the process of finding their own balance through the combination of different shapes and weights. 'Cultural Diversity is a Living Vitality' The event also featured a talk concert focused on cultural diversity. Director Yoo Hong-jun of the National Museum of Korea, producer Yoon Sang, poet Park Jun, and musical actor Kai discussed the topic of diversity. Director Yoo emphasized that cultural diversity is the vitality of culture, presenting the theme 'Cultural Diversity: Flowing Culture Nourishes the River.' Reflecting on his experiences as a student in 1967, he noted, "Back then, I had never heard discussions about cultural diversity. We were focused on exploring the uniqueness of our culture and its identity." He recalled the strong defensive reaction to foreign cultures due to their overwhelming influence. However, times have changed. Yoo illustrated how culture can thrive through diversity by citing examples such as Goryeo, which maintained its openness to foreign cultures and thus sustained itself for over 400 years, even as six dynasties in China rose and fell. Yoo stated, "Unchanging traditions ultimately lose their vitality and become mere customs. Preserving the original intent while adapting to the times is the true vitality of tradition." He added, "Seventy percent of the Korean language consists of Chinese characters. Accepting Chinese characters over 2,000 years ago provided immense momentum for our civilization. Today, Western languages, including English, have already made significant inroads. Writing evolves with diversity and self-development; it does not remain purebred." He advised, "While accumulating cultural diversity, we should also internalize what comes from outside and reject what does not fit. When negative influences arise, we must actively block them to allow culture to flourish." Yoo also noted that the global spread of K-Culture is a testament to the power of cultural diversity. He remarked, "K-Culture embraces external influences while developing its own identity. If K-Pop falls into a rut, the public will turn away," quoting a British music critic, and expressed hope that K-Culture will continue to expand as cultural diversity persists. Im Jin-taek, head of the Korea Arts and Culture Education Service, stated, "A society that embraces diversity is stronger and lasts longer," emphasizing that cultural diversity is a challenge for South Korea to move toward a sustainable future alongside the world. The 2026 Cultural Diversity Week event was organized to commemorate the United Nations-declared Day for Cultural Diversity and the Cultural Diversity Protection and Promotion Act. The event took place from May 21 to 27, featuring a variety of programs at the National Museum of Korea in Seoul and in four other cities: Busan, Chungbuk, Jeonnam, and Ansan. Busan showcased exhibitions, performances, and talk concerts highlighting the openness and exchange history of the maritime city. In Chungbuk, local residents and migrants shared their lives. Jeonnam hosted performances reimagining the sounds of the islands and ecological diversity art experiences, while Ansan engaged the youth through a talk concert titled 'Ordinary Diversity.'* This article has been translated by AI. 2026-05-29 00:06:00

U.S. April PCE Inflation Rises 3.8%, Highest in Nearly Three Years U.S. April PCE Inflation Rises 3.8%, Highest in Nearly Three Years Rising oil prices due to the U.S.-Iran conflict have pushed the Personal Consumption Expenditures (PCE) price index in the United States to its highest level in nearly three years. According to Yonhap News on May 28, the U.S. Department of Commerce reported that the PCE price index increased by 3.8% in April compared to the same month last year. This marks the largest increase since May 2023 (4.0%) and represents a 0.4% rise from the previous month. Excluding food and energy, the core PCE price index rose by 3.3% year-on-year, the highest since October 2023, and increased by 0.2% from the previous month. The year-on-year increases for both the overall and core indices aligned with forecasts compiled by Dow Jones. However, the month-on-month increases fell short of expert expectations by 0.1 percentage points for both indices. The PCE inflation rate has been rising since February, driven by the impact of high oil prices stemming from the Iran conflict. The PCE price index reflects the prices of goods and services consumed by households, and the Federal Reserve uses it as a benchmark to assess its monetary policy goal of a 2% inflation rate. Seoul to Resume Emergency Demolition of Seosomun Overpass Seoul City announced on May 28 that it will begin emergency demolition of the remaining structures of the Seosomun overpass starting at midnight on May 29. This action follows the approval of the demolition plan by the Ministry of Employment and Labor. The city estimates that the demolition and safety reinforcement work will take a total of 29 hours, including 15 hours for the demolition and 14 hours for finalization. If the demolition proceeds as planned, all work, including testing operations, is expected to be completed by 5 a.m. on May 30, allowing for the reopening of Seosomun Road and the first train service on the Gyeongui Line. The actual demolition of the structure is anticipated to take about 7 hours. From midnight to 3 p.m. on May 29, roads near the construction site will be fully closed. This emergency demolition aims to swiftly remove the remaining structures to ensure public safety and to normalize traffic on Seosomun Road and the Gyeongui Central Line, which are currently halted. The city plans to use a 'crushing method' for the complete demolition of the remaining structures to prioritize safety and expedite the process. National Pension Service Increases Domestic Stock Target Allocation to 20.8% The National Pension Service has decided to raise its target allocation for domestic stocks from 14.9% to 20.8% this year. This adjustment comes as the actual holdings of domestic stocks have significantly exceeded the target due to a recent surge in the KOSPI index. According to Yonhap News, the National Pension Fund Management Committee held its fifth meeting on May 28, where it reviewed and approved adjustments to the target allocations for various asset classes and a mid-term asset allocation plan for 2027-2031. The mid-term asset allocation plan outlines target allocations and management directions for stocks, bonds, and alternative investments over the next five years, serving as a guideline to enhance the fund's profitability and stability. Initially, the target allocation for domestic stocks was set at 14.4% as per the fund management plan approved in May last year. Following the continued rise in the domestic stock market, the target was raised to 14.9% in January. The upper limit, including allowable ranges, was set at 19.9%. However, as the KOSPI continued to surge, the actual allocation for domestic stocks reached 24.5% by the end of February. Consequently, the committee decided to increase the target allocation to 20.8% after considering market conditions, fund profitability, stability, and the impact on financial markets. The committee explained that this decision aims to enhance long-term profitability and stability while mitigating market shocks from rebalancing due to potential structural changes in the domestic stock market. The adjusted target allocation will take effect starting next month, following the end of the rebalancing suspension. Other asset class target allocations will also be adjusted accordingly. NVIDIA CEO Jensen Huang to Visit South Korea Next Week for Semiconductor Talks NVIDIA founder and CEO Jensen Huang is expected to visit South Korea next week. This will be his first visit since attending the APEC CEO Summit in Gyeongju last October. According to industry sources on May 28, Huang will travel to South Korea after wrapping up his schedule at NVIDIA's annual AI conference, GTC Taipei 2026, and the IT exhibition Computex 2026, both taking place in Taipei next week. GTC Taipei is scheduled for June 1-4, where Huang will deliver a keynote speech on NVIDIA's next-generation AI semiconductors and AI infrastructure strategy. Industry insiders anticipate that Huang's visit will facilitate discussions with domestic semiconductor companies, including Samsung Electronics and SK Hynix, regarding high-bandwidth memory (HBM), next-generation AI accelerators, and foundry collaborations. Additionally, discussions on AI collaboration across various sectors, including cloud computing and physical AI, with major IT companies such as LG and Naver are also expected to take place during his visit. Previously, Huang visited South Korea in late October for the APEC summit, where he held a meeting with Samsung Electronics Chairman Lee Jae-yong and Hyundai Motor Group Chairman Chung Eui-sun, referred to as a 'gangbu meeting.' Democratic and Progressive Parties Unite Behind Kim Sang-wook for Ulsan Mayor On May 28, one day before early voting for the Ulsan mayoral election on June 3, the Democratic Party and the Progressive Party announced their unification behind Kim Sang-wook, the Democratic candidate for mayor. Kim Sang-wook and Kim Jong-hoon, the Progressive Party candidate, held a joint press conference in front of the Ulsan Election Commission around 5:50 p.m. to announce the results of a public opinion poll conducted to determine the unified candidate. During the day, both candidates used polling firms of their choice to conduct surveys utilizing anonymous phone numbers, resulting in Kim Sang-wook being selected as the unified candidate for both parties. Kim Jong-hoon, who lost in the primary, accepted the results and submitted his resignation as a candidate to the Ulsan Election Commission just before the announcement. Kim Sang-wook stated, "I will carry the hopes and wishes of my comrades in the Progressive Party in my heart and strive to create a citizen-led Ulsan and achieve true democratization." He also expressed respect and gratitude to Kim Jong-hoon for making a difficult and courageous decision. The initial public opinion poll for unification was conducted from May 23 to 24. However, on May 24, Kim Sang-wook's camp raised concerns about the omission of a 'reverse selection prevention clause,' leading to a suspension of the primary. Subsequently, Kim Sang-wook's camp proposed a re-election with safeguards against organized interference from specific factions, which Kim Jong-hoon accepted on May 27, allowing the primary to proceed.* This article has been translated by AI. 2026-05-28 22:08:00

U.S. PCE Prices Rise 3.8% in April, Highest in Nearly Three Years The U.S. Personal Consumption Expenditures (PCE) price index rose 3.8% in April compared to the same month last year, marking the highest increase in nearly three years, driven by high oil prices amid the ongoing conflict in Iran. According to Yonhap News on May 28, the U.S. Department of Commerce reported that the PCE price index saw a 0.4% increase from March. This is the largest rise since May 2023, when it reached 4.0%. Excluding food and energy, the core PCE price index increased by 3.3% year-over-year, the highest since October 2023, and rose 0.2% from the previous month. The year-over-year increases for both the overall and core indices aligned with forecasts compiled by Dow Jones. However, the month-over-month increases fell short of expert predictions by 0.1 percentage points for both indices. The rise in the PCE price index has been accelerating since February due to the impact of high oil prices stemming from the conflict in Iran. The PCE price index reflects the prices of goods and services consumed by households and is a key indicator used by the Federal Reserve to assess its monetary policy goal of a 2% inflation rate.* This article has been translated by AI. 2026-05-28 22:02:00

Seoul Mayoral Candidates to Vote on First Day of Early Voting Jung Won-o, the Democratic Party candidate for Seoul mayor, and Oh Se-hoon, the People Power Party candidate, will cast their votes on the first day of early voting on May 29. According to political sources on May 28, Jung plans to vote at 8:20 a.m. at the administrative complex in Sogong-dong, Jung-gu, where his campaign office is located. His spouse, Moon Hye-jung, will accompany him. Jung's team emphasized the need for active participation from Seoul citizens, stating, "To ensure a safe Seoul, it is essential for residents to vote. We are voting on the first day to encourage early voting." Oh will also visit a polling station on the first day of early voting. He is scheduled to vote at 8 a.m. at the Hannam-dong Community Center in Yongsan-gu. Oh's campaign stressed, "Voting is crucial for Seoul to succeed and for the protection of South Korea. We encourage voters to participate in early voting." Early voting for the June 3 local elections will take place from May 29 to 30 at 3,571 polling stations nationwide, operating from 6 a.m. to 6 p.m. The main election will be held on June 3 from 6 a.m. to 6 p.m.* This article has been translated by AI. 2026-05-28 21:56:00

Candidates Clash Over LegoLand Crisis and Local Knowledge in Gyeonggi Election Debate Candidates for the Gangwon governor position, Woo Sang-ho of the Democratic Party and Kim Jin-tae of the People Power Party, engaged in a heated debate on May 28 regarding the LegoLand crisis and their familiarity with the province. Woo emphasized his status as a candidate from a strong ruling party, while Kim questioned, "Why does every banner say 'sent by the president'? Can't you do anything on your own?" During the Gangwon Election Broadcasting Debate Committee's forum, Woo stated, "The LegoLand crisis has shaken the South Korean economy," adding that according to Namuwiki, Kim is the first person in history to refuse to repay local bonds. He also referenced remarks from Choo Kyung-ho, the People Power Party's candidate for Daegu mayor and former finance minister, who indicated a significant crisis at that time. In response, Kim asserted, "I never said I wouldn't repay. If that caused financial disruption, then the Lee Jae-myung administration created a 100 trillion won market stabilization fund, which caused twice as much financial crisis. Lee declared a moratorium during his time as mayor of Seongnam." He insisted that he had not harmed the state, stating, "I attempted to amend the contract with LegoLand through a rehabilitation process, but we missed that opportunity, which is regrettable." The candidates also clashed over property ownership. Woo questioned why Kim owns an apartment in Daechi-dong, Seoul, instead of purchasing property in Gangwon, to which Kim replied, "I only own one house, and its value increased during the Roh Moo-hyun and Moon Jae-in administrations." Woo raised concerns about Kim's wealth, noting that it increased by 700 million won since he took office. He referenced Kim's previous claim that the increase was due to inheritance from his late father-in-law. Kim clarified, "I was mistaken at that time. The increase was due to election cost reimbursements and the sale of an apartment." He added that he had disclosed all relevant financial information in the official gazette, criticizing Woo for questioning his finances as an ungracious act. Kim pressed Woo on his knowledge of Gangwon, asking him where the Jeongja-ri tourist complex is located. When Woo failed to answer, Kim escalated his questioning by asking about the direction of the Gwangdeok Tunnel. Woo responded, "Don't set traps," to which Kim retorted, "If you're looking at my policy materials to ask questions, saying it's wrong is mocking the voters." Kim also challenged Woo's claim of securing a site for a data center in Gangneung, stating, "The site is still under review; how can it be confirmed? There is no land available for a data center in Gangneung." Kim, a four-term lawmaker, asked Woo if he had ever made a significant proposal for Gangwon. Woo admitted he had not made any primary proposals but had co-sponsored legislation, asserting that it is morally appropriate for local lawmakers to take the lead. He noted that he was a lawmaker for Seoul's Seodaemun District at the time. Despite their disagreements, both candidates agreed on the need to attract businesses and support local enterprises to address population decline and create jobs for young people. Woo acknowledged, "I may not be fully aware of the specifics of Gangwon, and I ask for the understanding of the residents. I have strong connections with the government and the National Assembly, and my abilities are unparalleled." Kim criticized, "Do voters really need to look at Woo's campaign materials?" He added, "If he doesn't even know where the Jeongja-ri tourist complex is located, and if he doesn't manage to open the Gwangdeok Tunnel in Sokcho, it would be a disaster for Gangwon."* This article has been translated by AI. 2026-05-28 21:08:00

Bank of Korea Holds Interest Rate Steady Amid Inflation Concerns The Bank of Korea's Monetary Policy Committee has kept the base rate steady at 2.50% for the eighth consecutive time. Amid rising inflation expectations due to high oil prices and exchange rates stemming from the Middle East conflict, two committee members expressed dissenting opinions advocating for a rate hike, indicating a stronger hawkish stance within the bank. On May 28, the Monetary Policy Committee decided to maintain the base rate at 2.50%. While inflationary pressures are increasing and economic growth is more robust than anticipated, the committee deemed it prudent to keep rates unchanged due to ongoing uncertainties related to the Middle East situation. However, during this meeting, committee members Jang Yong-sung and Yoo Sang-dae voiced their opinions for a 0.25 percentage point increase in the base rate. The committee's statement on monetary policy direction noted, "Future monetary policy will be determined by assessing the extent of inflationary pressures, the trajectory of economic improvement, and financial stability conditions." The hawkish sentiment among committee members was also reflected in their six-month conditional rate forecasts. The most common projection was 3.00%, with ten members supporting it, while seven members forecasted 2.75%. Projections for 3.25% and 2.50% were each supported by two members, suggesting that at least three members expect two rate hikes by November of this year. In its revised economic outlook, the Bank of Korea raised its consumer price inflation forecast for the year from 2.2% to 2.7%, an increase of 0.5 percentage points. The core inflation rate is projected to be 2.4% this year and 2.3% next year. The bank cited rising international oil prices due to the Middle East conflict, persistent high exchange rates affecting import prices, and increased demand-side inflation pressures from rising incomes as contributing factors. The Bank of Korea anticipates that inflation rates could rise to around 3.0% in the second half of the year. Notably, in August, the impact of last year's telecommunications fee discounts is expected to result in both consumer and core inflation reaching their highest levels of the year. There remains significant uncertainty regarding the inflation trajectory due to developments in the Middle East. Should the situation stabilize quickly, inflation rates for this year and next could be 0.2 and 0.3 percentage points lower than the baseline forecast, respectively. Conversely, if the negotiation stalemate persists, inflation rates could rise by 0.3 and 0.5 percentage points, respectively. Lee Ji-ho, head of the Bank of Korea's Economic Research Division, stated at the economic outlook briefing, "The fundamental premise for consumer price inflation is the exchange rate and oil prices, and the ongoing high exchange rate is impacting inflation. Currently, the most significant factor driving prices is the impact of oil prices due to the Middle East situation." Next year, while supply-side shocks from rising international oil prices are expected to ease somewhat, demand-side inflation pressures are projected to expand, leading to both consumer and core inflation rates exceeding target levels. The forecast for the current account surplus has also been significantly revised upward. The Bank of Korea now expects a current account surplus of $250 billion this year and $190 billion next year, up from previous forecasts of $170 billion and $140 billion, respectively. The bank noted that while rising international oil prices will increase energy import costs, the growth in semiconductor exports is expected to offset this, leading to an expanded surplus primarily in the goods balance. * This article has been translated by AI. 2026-05-28 20:26:00

Wage Disparity Worsens in Q1; Low-Income Households Face Increased Deficit Spending Despite improvements in average wage indicators in the first quarter of this year, driven by performance bonuses in large export-oriented companies, the economic sentiment among ordinary citizens remains bleak. The growth in real wages has slowed, and low-income households are experiencing a faster increase in consumption than in income, leading to a deeper structure of deficit spending.According to the Ministry of Employment and Labor's "April 2026 Business Labor Survey Results" released on May 28, the average nominal wage for employees in businesses with one or more regular workers was 4.555 million won, a 3.4% increase (149,000 won) compared to the same period last year.However, when adjusted for inflation, the real wage was 3.847 million won, reflecting only a 1.3% increase (49,000 won). The ongoing rise in consumer prices has significantly offset the nominal wage gains.In March, when performance bonuses and special allowances were concentrated, the wage gap between businesses of different sizes became more pronounced. The average total monthly wage for employees in businesses with 300 or more workers was 6.512 million won, approximately 1.7 times that of businesses with fewer than 300 workers (3.743 million won). The absolute wage gap reached 2.769 million won.Special payments for regular employees increased by 4.4% year-on-year to 526,000 won, reflecting the impact of expanded performance bonuses in major export sectors such as semiconductors, automobiles, and shipbuilding.In contrast, small and medium-sized enterprises, struggling with sluggish domestic demand and high interest rates, have faced challenges in securing funds for performance bonuses, exacerbating the perception of wage polarization. For instance, the total wage in the accommodation and food service sector in March was 2.343 million won, significantly below the overall average.The increase in real wages has also been minimal. In March, real wages were 3.56 million won, showing only a 0.1% increase compared to the same month last year. With consumer price inflation remaining around 2%, the perceived improvement in wages has been limited.The wage gap and stagnation in real wages are also evident in household data. The National Data Agency's "First Quarter 2026 Household Trends Survey Results" revealed that the average monthly income per household was 5.481 million won, a 2.4% increase compared to the previous year. However, the real income growth rate, adjusted for inflation, was only 0.4%.Household consumption expenditure rose by 5.3% to 3.105 million won, significantly outpacing income growth. Consequently, the average household surplus decreased by 3.1% to 1.239 million won, while the average consumption propensity increased by 1.7 percentage points to 71.5%.Notably, the bottom 20% of earners, or the first income quintile, saw their average monthly income rise by 2.7% to 1.17 million won, but their consumption expenditure surged by 7.3%. Their average consumption propensity reached 155.3%, indicating that their spending exceeds their disposable income. This suggests that many households are relying on debt or depleting existing assets to cover living expenses.In contrast, the average monthly income for the top 20% of earners, or the fifth income quintile, increased by 4.2% to 12.378 million won, with disposable income rising by 5.1%. Their consumption expenditure also grew by 6.9%, but their average consumption propensity remained at 57.7%.The income gap continues to widen. The quintile ratio for equalized disposable income rose to 5.91 times, up from 5.82 times in the same period last year. Equalized disposable income is a measure that reflects differences in household size, indicating that a higher figure signifies an increase in income polarization.* This article has been translated by AI. 2026-05-28 20:24:00

Bank of Korea Governor Shin Hyun-sung Signals Rate Hike Amid Inflation Concerns Bank of Korea Governor Shin Hyun-sung stated on May 28 that "inflation, growth, exchange rates, and real estate are all pointing in the same direction," indicating the need for a rate hike at an appropriate time. His remarks suggest a clear intention to tighten monetary policy in the second half of the year. After presiding over his first Monetary Policy Committee meeting, Shin noted that inflation is expected to remain above target for an extended period while growth continues to show solid improvement. He remarked, "Monetary policy can be challenging when multiple objectives conflict, but this time is an exception; the paths for inflation, growth, exchange rates, and real estate are clear." The recently released dot plot revealed a hawkish sentiment among committee members, with 19 out of 21 projections indicating a rate above the current level of 2.50%. Shin emphasized the importance of three factors: when to raise rates, how quickly, and to what extent, suggesting that the dot plot might provide insights into these questions. Market sentiment is leaning towards a July rate hike as a foregone conclusion. Based on Shin's comments, analysts suggest that consecutive increases in July and August are also feasible. Kim Sung-soo, a researcher at Hanwha Investment & Securities, stated, "The Bank of Korea is now in an environment where it can focus solely on price stability. The decision to hold rates steady this time was likely a move to provide guidance before a hike, making a July increase almost certain." Baek Yoon-min, a researcher at Kyobo Securities, noted, "While we expected inflation to peak in the second half of the year, the ongoing conflict in the Middle East could keep international oil prices elevated for an extended period, impacting inflation. It is reasonable to anticipate two rate hikes within this year as a basic scenario." Additionally, the Bank of Korea raised its economic growth forecast by 0.6 percentage points to 2.6%. Shin explained that while the Middle East conflict is expected to lower this year's growth rate by about 0.4 percentage points, stronger-than-expected semiconductor performance and increased IT exports could boost growth by 0.7 percentage points. He also noted that the government's supplementary budget and a booming stock market are expected to raise consumption and investment, contributing an additional 0.2 and 0.1 percentage points, respectively. In its optimistic scenario for the semiconductor market, the Bank of Korea anticipates that semiconductor export volumes could expand to the mid-20% range this year and maintain a high level in the mid-10% range next year, potentially increasing domestic growth rates by 0.5 percentage points this year and 0.3 percentage points next year, pushing economic growth above 3%. Conversely, in a pessimistic scenario where semiconductor export volume growth slows to the mid-10% range this year, the growth rate is expected to decrease by 0.3 percentage points this year and 0.2 percentage points next year.* This article has been translated by AI. 2026-05-28 20:24:00

National Pension Service Increases Domestic Stock Target Allocation to 20.8% The National Pension Service has decided to increase its target allocation for domestic stocks from 14.9% to 20.8% this year. This adjustment reflects the significant rise in the KOSPI index, which has pushed the actual share of domestic stocks held well above the initial target. According to Yonhap News Agency, the National Pension Fund Management Committee held its fifth meeting on May 28, where it reviewed and approved a proposal to adjust the target allocations for various asset classes and the medium-term asset allocation plan for 2027 to 2031. The medium-term asset allocation plan outlines the target allocations and management directions for stocks, bonds, and alternative investments over the next five years. It serves as a guideline to enhance the fund's profitability and stability. Initially, the target allocation for domestic stocks was set at 14.4% as per the fund management plan approved in May of last year. However, as the domestic stock market continued to rise, the committee raised the target allocation to 14.9% in January, with an upper limit of 19.9% including allowable ranges. As the KOSPI continued to surge, the actual allocation of domestic stocks reached 24.5% by the end of February. In light of this, the committee decided to raise the target allocation to 20.8%, considering market conditions, fund profitability and stability, and the impact on financial markets. The committee explained that this decision was made to enhance long-term profitability and stability while considering the potential structural changes in the domestic stock market and the need to mitigate market shocks from rebalancing. The adjusted target allocation will take effect at the end of next month, when the current rebalancing suspension ends. Other asset class target allocations will also be adjusted in line with the increased domestic stock allocation. By the end of this year, the target allocations for various asset classes will be 34.7% for overseas stocks, 23.1% for domestic bonds, 7.4% for overseas bonds, and 14.0% for alternative investments. To respond to the volatile domestic stock market, the committee has temporarily expanded the allowable range for strategic asset allocation (SAA) for domestic stocks. However, specific allowable ranges will not be disclosed to ensure market stability and fairness in fund management. Additionally, to minimize market impact, the committee has improved related rules, including reducing the maximum daily rebalancing size. The committee plans to reassess the SAA allowable range by the end of this year. The committee also confirmed the medium-term asset allocation plan for 2027 to 2031, which maintains the focus on expanding overseas and alternative investments. By the end of 2031, the target allocations for various asset classes are expected to be approximately 55% for stocks, 30% for bonds, and 15% for alternative investments. For next year, the target allocation for domestic stocks will remain at 20.8%. The allocations for overseas stocks, domestic bonds, overseas bonds, and alternative investments have been set at 35.6%, 21.8%, 7.4%, and 14.3%, respectively. Jeong Eun-kyung, Minister of Health and Welfare, stated, "This medium-term asset allocation is a decision made in response to recent market changes, aimed at enhancing the long-term profitability and stability of the fund while also considering its impact on financial markets. We will continue to closely monitor market conditions to ensure that fund management balances principles and flexibility."* This article has been translated by AI. 2026-05-28 20:06:00