The Bank of Korea on Thursday raised its benchmark interest rate for a second consecutive meeting, continuing monetary tightening amid persistent inflationary pressure.

The Monetary Policy Board increased the rate by 0.25 percentage point to 3 percent, following a similar hike in July.

The decision came as inflationary pressure remained strong, supported by rising incomes from the semiconductor boom. Real gross domestic product expanded 0.6 percent in the second quarter from the previous quarter, three times the BOK’s 0.2 percent forecast, after a 1.8 percent increase in the first quarter. The stronger-than-expected growth gave the central bank more room to revise its outlook, even as it kept policy focused on price stability.

Core inflation, which excludes volatile items, also stayed elevated, pointing to sustained underlying price pressure. It rose 2.6 percent in July, above the BOK’s 2 percent target.

Following the stronger-than-expected second-quarter growth, the central bank raised its 2026 growth forecast to 3.3 percent from the 2.6 percent projection issued in May. The May estimate had already been revised upward from 2 percent.