The Bank of Korea has predicted that the impact of the continuous key interest rate hikes will appear gradually over time.

According to the central bank's trend analysis team on Wednesday, the impact of the rate hikes on the economic growth rate will be relatively large as private consumption accounts for the largest share of the GDP.

The team added that when the key rate is raised by zero-point-25 percentage points, private consumption will decrease as much as zero-point-15 percent.

The central bank also predicted that investments in facilities and construction will also be negatively affected, dropping by up to zero-point-15 percent and zero-point-13 percent, respectively, per 25 basis point hike.

The BOK added that although a slowdown in demand is inevitable due to the rise in interest rates, it will also significantly ease inflation.

The central bank did concede that the impact of rising interest rates will likely have the most detrimental impact on low-income and marginal households and businesses.