Ministry of Economy and Finance

On September 23, Deputy Prime Minister and Minister of Economy and Finance Koo Yun Cheol held a meeting with the IMF team, led by Mission Chief for Korea Mr. Rahul Anand, as part of the 2025 Article IV Consultation*. The mission team has been visiting Korea from September 11 to 24.   * Under Article IV of the IMF Articles of Agreement, the IMF holds annual consultations with each member country to review overall economic conditions – including macroeconomic, fiscal, and financial developments – and subsequently  publishes a country report following approval by the IMF Executive Board.   Mission Chief Mr. Anand briefed DPM Koo on the outcomes of the two-week Article IV consultation, the first to be conducted since the launch of the new administration, and exchanged views on key issues. He assessed that the Korean economy is on a recovery path, supported by the expansionary fiscal stance, including the supplementary budget, and the easing of domestic uncertainties, and projected that this recovery trend will continue into next year.   He also highly commended the new government’s structural reform efforts aimed at boosting growth, such as the ultra-innovative economy initiative and the AI transformation. He stressed that greater investment in such innovations would help consolidate Korea’s edge in high-tech industries and enhance its export competitiveness, even amid global trade uncertainties. In addition, he noted that policies such as expanding service exports, including K-content, and diversifying export markets would further support Korea’s external competitiveness.   At the same time, he acknowledged the need for expansionary fiscal policy to support economic growth at the current juncture, and assessed that the fiscal management approach reflected in the 2026 budget proposal was appropriate and effective. However, while Korea’s fiscal capacity is sufficient in the short term, he recommended that the government carefully assess and prepare for medium- to long-term fiscal risks, particularly in light of rising mandatory spending due to population aging.   DPM Koo concurred with Mission Chief Anand’s overall assessment of the Korean economy, and emphasized that, under the recognition that the next five years are “the golden time for the Korean economy,” the government will mobilize all policy capacities and foster collaboration among all economic actors to seize the opportunity for a rebound in growth.   Furthermore, DPM Koo explained that the government will pursue “performance-oriented fiscal management”, not merely fiscal expansion, so as to achieve both an active role of fiscal policy and long-term sustainability in meeting future demands. He also stated that fiscal policy will serve as a “turning point” in overcoming the crisis of low growth, establishing a virtuous cycle in which fiscal policy promotes growth and economic growth in turn leads to sound fiscal condition. The outcome of this year’s Article IV Consultation will be officially announced by the Korea mission team at a press conference to be held at the Government Complex-Seoul on September 24, at 10:00 a.m. Please refer to the attached files.   

On September 22, the Ministry of Economy and Finance (MOEF), together with the Organisation for Economic Co-operation and Development (OECD), held the 3rd Korea-OECD Seminar on Corporate Governance of State-Owned Enterprises (SOEs) at the OECD headquarters in Paris, France.   * Since 2023, Korea and the OECD have co-hosted the forum annually, bringing together public institution policy officials from OECD member countries and beyond to share policy trends and draw implications for corporate governance of state-owned enterprises.   The event was attended by the Director General for Public Institutions Policy at MOEF, the Deputy Ambassador at the Permanent Representative of Korea to the OECD, the Deputy Director of the OECD Directorate for Financial and Enterprise Affairs, as well as public institution policy officials from 30 countries, including both OECD members and non-members. Participants presented policy trends and case studies on three topics* related to SOEs governance and discussed future directions for advancement.   * (1)The role of SOEs in advancing public policy objectives; (2)Sustainability, responsible business conduct and the role of the state and SOEs; and (3)Embracing digitalization to enhance policy frameworks for disclosure and performance monitoring in SOEs.   The Korean delegation expressed its appreciation for the OECD’s efforts to develop international guidelines on SOEs governance frameworks and to explore and disseminate best practices. It also stated that, guided by the principles of “autonomous, responsible business conduct, and enhanced transparency”, Korea, as a leading country in SOEs governance, will continue to contribute to international discussions aimed at bolstering the sustainability of SOEs.   In the first session, which focused on the proactive role of SOEs, Korea presented its efforts to adapt to changing policy environments, including the restructuring of evaluation frameworks to drive breakthrough innovation in listed public enterprises, the management of workforce deployment and investment execution for advancing national priorities, as well as the enhancement of safety management, promotion of AI utilization by SOEs, and expansion of ESG management. In particular, Korea placed special emphasis on its commitment to reinforcing safety management in SOEs, with the goal of realizing “public workplaces where life and safety come first”.   In the second session, which addressed social responsibility and sustainability such as enhancing safety management, Korea presented the current status of ESG management in SOEs along with its plan to establish ESG guidelines. Korea also introduced key elements of the SOEs safety management enhancement measures announced at the Ownership Steering Committee on September 1, including safety management guidelines and a safety rating system for SOEs, provisions for the dismissal of heads of institutions responsible for serious industrial accidents, strengthened evaluation and disclosure of safety-related management, and the application of AI to safety management.   In the third session, which dealt with the scientific governance framework for SOEs, Dr. Minsang Yi of the Korea Institute of Public Finance presented Korea’s approaches to SOEs governance utilizing digital technologies, including information disclosure and electronic reporting, performance evaluation through computer networks, and customer satisfaction surveys. He also showcased best practices of digital technology utilization in Korean SOEs, such as an in-house AI system at Korea Southern Power, digital twin dam management at Korea Water Resources Corporation, and data- and AI-based corporate analysis at the Korea Credit Guarantee Fund.   Going forward, MOEF plans to utilize the discussions held at this event to develop SOEs governance policies that align with global standards, and will continue to collaborate with OECD member countries by sharing policy cases and best practices on SOEs governance. Please refer to the attached files.  

On September 22, Deputy Minister for International Affairs Choi Ji-young held a meeting with the Dean and CEO of the Asian Development Bank Institute (ADBI)[1] Bambang Brodjonegoro at the Government Complex-Seoul to discuss ways to enhance cooperation between Korea and the ADBI.   Deputy Minister Choi stated that the Korean government will continue to pursue international solidarity in line with the principle of pragmatism prioritizing national interest, with a particular focus on strengthening ties with the Global South. He also conveyed his expectation that more Korean institutions and experts will actively participate in the activities of the ADBI. In addition, he noted that Korea plans to place a strong focus on advancing its leadership in artificial intelligence (AI), and emphasized the importance of stepping up partnership with the ADBI in areas such as capacity-building programs and research activities, particularly by sharing Korea’s AI technology and policy expertise.   Dean Brodjonegoro explained that since taking office in April this year, he has been prioritizing efforts to help developing countries in the Asia-Pacific region overcome the middle-income trap. He underscored that regional cooperation and integration are crucial in this regard, and expressed his hope to expand collaboration with Korea, which he described as a representative success case. In response, Deputy Minister Choi highlighted Korea’s own development experience, noting that the country initiated its growth by bolstering infrastructure investment, and enhanced productivity through the introduction of foreign technologies and investment in research and development. Korea then turned the Asian financial crisis into an opportunity by undertaking comprehensive reforms. He also mentioned that he expects many Korean research institutes, universities, and experts to take part in the ADBI’s research on overcoming the middle-income trap and its knowledge-sharing activities, thereby broadly disseminating Korea’s experience and expertise.   [1] ADBI, a think tank and subsidiary of the Asian Development Bank (ADB), conducts research on development strategies in Asia and the Pacific and provides capacity-building programs. Please refer to the attached files.