On September 27, Deputy Prime Minister Choi Sang-mok met with the annual consultation team of Standard & Poor’s (S&P), one of the global credit rating agencies, at the Government Complex-Seoul to discuss the state of the Korean economy and major policy directions.
DPM Choi said that the exported-oriented economy recovery is continuing, driven by rising global trade and escalating demand for IT, and that domestic demand is expected to gradually recover as stronger exports lead to improved corporate earnings and household incomes.
He also explained that tailored support and incentives for vulnerable groups such as low-income earners and small business owners have been put in place to boost a rebound in domestic demand, while efforts to create quality jobs, such as corporate scale-up and regulatory innovation, will be promoted to improve fundamental domestic demand.
Next, DPM Choi reaffirmed the government’s commitment to reigniting the growth engine of the Korean economy based on the “Dynamic Economy Roadmap” announced in July, and emphasized that the government is not losing sight of efforts to secure future growth engines by shoring up investments in the “three game changers” namely AI, biotech, and quantum technology.
He also introduced the government’s policy efforts to advance Korea’s capital market, including the Corporate Value-up program and the opening of omnibus government bond accounts; he stressed that the official implementation of the Foreign Exchange (FX) Market Reform in July has paved the way for Registered Foreign institutions (RFIs) to participate in Korea’s FX market.
Lastly, DPM Choi noted that the government has consistently pursued policies to promote fiscal sustainability since its inauguration, which is consistent with the government’s policy principle of promoting economic growth by revitalizing the private sector, including businesses, while the public sector focuses on protecting the vulnerable and addressing market failures.
In response to DPM Choi’s explanation, the S&P consultation team agreed that maintaining fiscal sustainability is an obligation of any government, and noted that the government’s endeavors to enhance fiscal sustainability will contribute to maintain Korea’s credit ratings going forward.
The agency shared their view that Korea’s growth is expected to continue to be driven by robust export competitiveness, reaffirming its outlook that GDP per capita could exceed $40,000 by 2026 if this continues. In addition, they expressed their anticipation that the government’s efforts to advance the capital and FX markets will bear fruit.
Please refer to the attached files.
