Minister of Strategy and Finance and Deputy Prime Minister Choi Sang-mok, who visited Georgia for the ADB Annual Meeting, hinted at the possibility of revising the growth rate forecast, stating, “We are considering a revision in the growth rate (forecast).” He emphasized the need to manage the consumer price index, which dropped to 2.9% in the previous month, to prevent it from bouncing back to the 3% range.
Regarding the opposition’s demands for providing relief funds of 250,000 won per person, he expressed a cautious stance on the supplementary budget allocation for this purpose. He also mentioned that they are actively considering relaxing regulations on R&D pre-feasibility studies.
During a meeting with the dispatch press corps from the Bank of Korea on the 4th local time while attending the ADB Annual Meeting in Georgia, Deputy Prime Minister Choi talked about the surprising growth of Korea’s economy by 1.3% in the first quarter compared to the previous quarter, saying, “The GDP in the first quarter shows improvement, primarily in exports, and this is positive for the domestic production and indicators.”
He further stated, “This year’s biggest goal is not only the growth rate but also efforts to enhance domestic consumption and improve the livelihoods of the people.” He hinted at the possibility of revising the growth rate forecast for this year to 2.2%, as presented in the government’s economic policy direction in January. He noted that both the Bank of Korea and OECD have revised their forecasts, and they are also considering adjustments, emphasizing that different institutions are likely to have similar forecasts.
Regarding concerns about the gap between the actual economic situation and the optimism portrayed by the growth indicators, he explained, “Economics also involve psychological aspects, and emphasizing the positive aspects of indicators helps the economic entities’ confidence,” adding that the government is not solely basing its decisions on optimistic economic indicators.
In response to the recent forecast by S&P that Korea’s per capita GDP will exceed $40,000 by 2026, he expressed confidence that this target is achievable within the government’s term. He emphasized the importance of practical improvements in people’s lives rather than just focusing on the per capita GDP figure.
On the topic of managing inflation to prevent it from surging back to the 3% range, he stated the government’s commitment to controlling inflation and avoiding fluctuation. He also mentioned that it is still early to assess the tax situation this year, considering the challenges faced with tax revenue as of March due to declines in corporate tax revenue.
Concerning the cancellation of R&D pre-feasibility studies and the opposition’s call for a supplementary budget for relief funds, he expressed skepticism towards the supplementary budget, suggesting that targeted support for vulnerable groups might be more effective. He highlighted various areas such as supporting vulnerable groups, medical reform-related financial support, youth issues, regional development, low birth rates, and R&D in the upcoming national fiscal strategy meeting.
During the ADB Annual Meeting, Deputy Prime Minister Choi emphasized the significance of the agreement on enhancing regional financial safety measures and strengthening Asian solidarity that was reached at the ASEAN+3 Finance Ministers and Central Bank Governors’ Meeting. The agreement included initiating the capitalization of the CMIM fund, which aims to enhance financial safety measures in the region and reinforce Asian solidarity through leadership.
Furthermore, ASEAN+3 members agreed to advance the CMIM fund’s capitalization during their recent meeting, aiming to reform the funding structure from the current ‘commitment-based system’ to a ‘paid-in capital’ system to facilitate funds provision in times of crisis, led by South Korea.