Goldman Sachs economists expect Korea and Taiwan rate hikes
Updated
Updated · Bloomberg · May 11
Goldman Sachs economists expect Korea and Taiwan rate hikes
7 articles · Updated · Bloomberg · May 11
The bank forecasts two 25-basis-point increases in South Korea in the third and fourth quarters and two 12.5-basis-point rises in Taiwan in the second and fourth quarters.
It says AI-driven chip booms in both economies will widen trade surpluses and increase pressure on their central banks to tighten policy later this year.
The outlook highlights how semiconductor demand linked to artificial intelligence is creating uneven, export-led strength in Korea and Taiwan despite broader economic pressures.
With geopolitical tensions flaring, will Asian central banks actually raise rates as the AI chip boom rages on?
As AI's growth hinges on Taiwan, is the global economy ignoring the massive risk of a supply chain failure?
Is the AI boom a true productivity revolution, or a speculative bubble that central banks risk popping too soon?
South Korea & Taiwan 2026: AI Boom, Inflation Headwinds, and the Impact of Potential Rate Hikes
Overview
As of May 2026, South Korea and Taiwan are seeing explosive equity market rallies, driven by a global AI spending boom and strong semiconductor demand. This surge has attracted billions from both domestic and foreign investors. Goldman Sachs remains bullish on both markets, even as South Korea’s KOSPI index has more than tripled since early 2025. The rally is fueled by the AI boom and South Korea’s efforts to improve corporate governance and reduce the 'Korea discount.' These factors together highlight the powerful impact of technology trends and policy reforms on market performance.