Ministry of Economy and Finance

Deputy Prime Minister Choi Sang-mok held his first Investor Relations (IR) session on Korea since taking office, targeting global investors in New York.   This session was organized to maintain the global community’s robust trust in the Korean economy by providing accurate information, especially amidst continued external uncertainties such as increased financial market volatility due to shifts in major countries’ monetary policies, as well as the ongoing conflicts in the Middle East and Ukraine.   High-level executives from leading global asset management firms and investment banks attended the session; the world’s largest private equity firm Blackstone, global asset management firms such as Prudential, Morgan Stanley, and Brown Brothers Harriman (BBH), as well as major U.S. investment banks like JPMorgan and BNY Mellon.     [Details from the presentation on the Korean economy]   The session began with a presentation by Director General for International Finance Kim Jae-hwan on the following three key topics:   1. Where We Stand   The Korean economy has overcome numerous crises over the past 70 years, emerging as one of the advanced economies. Recently, efforts to enhance accessibility in the foreign exchange (FX) and capital markets have been highly evaluated by global investors, resulting in Korea’s inclusion in the World Government Bond Index (WGBI).   However, Korea still faces challenges, including reduced dynamism across the economy and global uncertainties arising from shifts in major countries’ monetary policies and conflicts in the Middle East and Ukraine.   2. Four Big Questions on Korea’s Economy   1) Economic growth   Korea’s economic recovery has continued since the fourth quarter of last year, and domestic demand is expected to visibly improve in the latter half of the year.   2) External soundness   Although Korea’s FX reserves have slightly decreased since 2022 due to the strong US dollar, similar to other major countries, they have still been assessed as sufficient for crisis response by international organizations like the IMF. In addition, Korea’s net external financial assets, which exceed $800 billion, its highest-ever national credit rating, and the successful issuance of FX stabilization bonds in June demonstrate the country’s strong external stability.   3) The impact of US-China tensions   While US-China tensions could pose challenges to Korea given that both countries are Korea’s largest economic partners, global supply chains restructuring could benefit Korea in areas of Korea’s strengths like electric vehicles and batteries. Hence, Korea will actively implement strategies to capitalize on these opportunities.   4) Debt issues   Thanks to the government’s firm fiscal stance, Korea’s government debt-to-GDP ratio remains significantly lower than that of other major advanced economies. Moreover, the household debt-to-GDP ratio has fallen for the first time since 2004, and indicators of foreign debt soundness remain at healthy levels, showing that the country’s overall debt is being managed stably.   3. Korea’s Strategy to Leap Forward   1) In order to invigorate private-sector-driven economic vitality, the government will facilitate a pan-governmental investment support system to encourage investment, expand regional consumption base, and provide sector-specific support to boost consumption capacity. At the same time, it will maintain a sound fiscal policy, moving away from growth driven by fiscal stimulus.   2) With an aim to enhance Korea’s growth potential by restoring economic dynamism, the government will focus on shoring up the innovation ecosystem to reignite growth engines, ensure equal opportunities, establish a fair reward system, and steadily work toward improving social mobility.   3) Risk management will be a top priority. The government plans to strengthen its resilience to economic security risks, such as supply chain disruptions through close international cooperation, while also proactively addressing challenges posed by demographic shifts and climate change to lay the foundation for sustainable growth in the Korean economy.     [Q&A on the Korean Economy]   During the Q&A session following the presentation, DPM Choi answered in detail on key issues of interest to investors as follows:   1) Korea’s inclusion in the WGBI   DPM Choi highlighted that this reflects the international community’s recognition of Korea’s economic credibility and efforts to enhance foreign investor access. He mentioned that a comprehensive review is scheduled for March next year and emphasized that Korea would continue working closely with global investors so that the improved systems can effectively work. Furthermore, he explained that with the “Korea discount” in the FX and bond markets now being addressed, the government would persist in its efforts to boost the value of stock market to achieve its full potential.         2) AI innovation policies   DPM Choi noted that Korea possesses the potential to be a leading AI producer, thanks to its world-class semiconductor technology and advanced ICT infrastructure. He reaffirmed that Korea, under the President-led National AI Committee, would focus its national capabilities on making AI a core engine of future growth. Regarding a question on AI-related energy demand and the role of nuclear power, he responded that Korea would expand renewable energy as much as possible while significantly increasing the proportion of zero-carbon energy sources such as nuclear and hydrogen, in order to achieve carbon neutrality as well as meet the industrial needs.         3) Strategies for addressing US-China tensions             DPM Choi underscored Korea is minimizing potential harm to Korean business in relation to major US trade issues including the Inflation Reduction Act (IRA) and the CHIPS and Science Act, under a robust US-Korea alliance and amicable relations with the US government. At the same time, Korea would continue to manage its close ties with China, aiming for mutually beneficial solutions that serve the national interests of both countries.       Please refer to the attached files. 

Deputy Prime Minister Choi Sang-mok attended the 2024 Asia-Pacific Economic Cooperation (APEC)[1] Finance Minsters’ Meeting, chaired by Peru, held in Lima, Peru from October 20 to 21.   [The APEC Finance Ministers’ Meeting]   At this meeting, high-level representatives from APEC member economies, including finance ministers, as well as officials from major international organizations such as the Organization for Economic Cooperation and Development (OECD) and the Asian Development Bank (ADB), gathered to discuss regional economic conditions and sustainable finance.   During the meeting, DPM Choi officially assumed the role of Chair for next year’s APEC Finance Ministers’ Meeting and introduced the discussion direction and priorities for the 2025 meeting. He highlighted three main discussion topics aimed at promoting sustainable growth and shared prosperity in the region: jrestoring economic dynamism, kpursuing prudent and well-designed fiscal policies, and lenhancing the stability of digital finance. These proposals gained broad support from member economies. In addition, he emphasized the need for APEC to strengthen its role in incubating policy ideas to actively address global challenges.   [Bilateral Talks]   DPM Choi held bilateral meetings with major finance ministers on the sidelines of the APEC Finance Ministers’ Meeting to exchange views on economic cooperation. On October 20, he met with the Finance Minister of Peru, José Arista, and pledged close cooperation as the outgoing and incoming chair countries of APEC. They also discussed supporting Korean companies’ overseas contracts in sectors like construction and defense, as well as enhancing Knowledge Sharing Program (KSP) collaboration.   On October 21, DPM Choi met with the Financial Secretary of Hong Kong, Paul Chen and discussed global economic trends and current economic issues between the two sides. In particular, they shared views on the progress of Hong Kong’s newly introduced Capital Investment Entrant Scheme (CIES)[2], which aims to attract foreign investment.     [Meeting with Local Companies]   DPM Choi hosted a roundtable with local companies operating in Peru to listen to their concerns. The meeting was attended by eight local companies (Samsung Electronics, LG Electronics, Hyundai Heavy Industries, Dohwa Engineering, POSCO International, Korea Zinc, Korea Aerospace Industries, and SK Innovation) and two public institutions (Korea International Cooperation Agency and Korea Trade-Investment Promotion Agency). He attentively listened to the challenges and suggestions raised by the companies and promised to work closely with the Peruvian government to create a more favorable business environment for Korean firms.   [1] The largest regional economic cooperation forum aimed at promoting economic growth and prosperity in the Asia-Pacific region, with 21 member economies including Korea, the United States, and China.        [2] A program that offers foreign investors the opportunity to obtain permanent residency by investing a certain amount and maintaining it for a specified period. Please refer to the attached files. 

Deputy Prime Minister Choi Sang-mok will depart on the evening of October 19 to attend:   ① The Asia-Pacific Economic Cooperation (APEC) Finance Ministers’ Meeting (Lima, Peru), ② The Investor Relations (IR) session on Korea (New York, USA), ③ The G20 Finance Ministers and Central Bank Governors Meeting, ④ The World Bank (WB) Development Committee Meeting, and ⑤ Meetings with global credit rating agencies.   [The APEC Finance Ministers’ Meeting]   DPM Choi will attend the 2024 APEC Finance Ministers’ Meeting, held in Lima, Peru, from October 20 to 21.   This meeting will bring together representatives from 21 APEC member economies, as well as major international organizations such as the International Monetary Fund (IMF), the Organization for Economic Cooperation and Development (OECD), and the Asia Development Bank (ADB), along with members of APEC’s official private-sector advisory body, the APEC Business Advisory Council (ABAC). They will share views on key issues, including the regional and global economic situation, sustainable finance, digital transformation.   As Korea is set to host the APEC Finance Minsters’ Meeting in Incheon next October as chair in 20 years, DPM Choi will officially assume the role of chair for next year’s meeting during this event. He will present the vision and agenda for the 2025 discussions to member states and hold bilateral meetings with finance ministers from major countries, including Peru.   [The IR session on Korea]   On October 22, DPM Choi will hold his first IR session on Korea since taking office, targeting global investors in New York, a major financial hub.   During the session, DPM Choi will explain Korea’s strong economic fundamentals, supported by its fiscal soundness, and outline the government’s policy direction, including dynamic economy initiatives and capital and foreign exchange market advancements. Not only that, he will address concerns and interests raised by investors to ensure that the international community’s positive perception of Korea’s economy is maintained and further strengthened.   [G20 Finance Ministers’ Meeting]                                                                                                                                       From October 23 to 24, DPM Choi will attend the 4th G20 Finance Ministers and Central Bank Governors Meeting of 2024.   The meeting, held in Washington D.C. alongside the IMF and WB Annual Meetings, is the final finance ministers’ meeting hosted by this year’s G20 chair, Brazil. The discussions will review 2024’s achievements and future tasks focusing on two key sessions: ①reforms of Multilateral Development Banks (MDBs), and ②global economic cooperation strategies.   In Session 1, DPM Choi, as co-chair of the International Financial Architecture Working Group[1], will deliver a keynote address highlighting the significance of the recently established MDB reform roadmap and call for its successful implementation. In session 2, he will propose structural reforms and fiscal innovations to restore growth potential as fundamental solutions for enhancing global crisis response capabilities.   [The WB Development Committee Meeting]   On the last day, October 25, DPM Choi will participate in the WB Development Committee Meeting, where discussions will focus on creating a “Future-Ready” WBG. He will also provide insights on how the WB can adapt to the changing global development landscape, support low- and middle-income countries, and promote private sector investment in developing nations. Furthermore, he will meet with the WB President for the fourth time this year, following the meetings in January, April, and July, to discuss cooperation between Korea and the WB.   [Meetings with global credit rating agencies and financial institutions]   On the same day, DPM Choi will meet with Global Head of Sovereign Ratings at Moody’s, Marie Diron, to explain Korea’s key economic policy directions, and make an all-out effort to maintain strong international trust in the Korean economy among foreign institutions and investors.   He will also meet with the Euroclear’s top executive in charge of Omnibus accounts for government bond, Isabelle Delrome, to discuss final preparations and future plans before capital inflows with the inclusion of Korean government bonds in the World Government Bond Index (WGBI) in the second half of next year. [1] A G20 working group addressing global financial safety net issues, co-chaired by Korea and France since 2016. Please refer to the attached files.