▲ Participants pose for a group photo at the 'Expanded Macroeconomic and Financial Meeting' held at the Government Complex Seoul in Jongno-gu, Seoul, on the 10th.
The heads of the four major economic policy agencies have agreed to cooperate closely to stabilize the public livelihood and manage risks amid increasing financial volatility.
During the Expanded Macroeconomic and Financial Meeting presided over by Deputy Prime Minister and Minister of Finance and Economy Koo Yoon-cheol at the Government Complex Seoul this morning (the 10th), the attendees—including Deputy Prime Minister Koo, Minister of Planning and Budget Park Hong-keun, Bank of Korea Governor Shin Hyun-song, and Financial Services Commission Chairman Lee Eok-won—assessed that the recent increase in financial market volatility could heighten the burden on vulnerable sectors.
They specifically noted that rising interest rates could increase the repayment burden for low-income and low-credit borrowers, as well as small business owners and micro-entrepreneurs, while rising exchange rates could impact small and medium-sized import and processing companies.
Furthermore, they expressed concern that increased stock market volatility could lead to risks from leveraged investments affecting various sectors.
The participants agreed that as tax revenue is expected to increase due to favorable economic conditions, fiscal capacity should be utilized for future-oriented investments, such as enhancing potential growth rates.
In addition, they shared the view that an active role for fiscal policy is necessary to resolve polarization and alleviate the burden on the public caused by inflation, and that fiscal structural reform and expenditure restructuring are required.
The participants assessed that the Korean economy is maintaining a generally positive trend, noting that nominal Gross Domestic Product (GDP) for the first quarter grew by 17.1% compared to the same period last year, and exports in May increased by 53.2%.
As the harmonious operation of macroeconomic policies is crucial during periods of high volatility, the attendees decided to further strengthen inter-agency cooperation in preparing economic growth strategies for the second half of the year and in the future implementation of policies.
Unlike previous meetings, this session was held in an expanded format with the participation of Bank of Korea Governor Shin to comprehensively examine macroeconomic and financial market conditions.
Moving forward, the agencies plan to operate the meetings flexibly, inviting other institutions beyond the Ministry of Finance and Economy, the Ministry of Planning and Budget, and the Financial Services Commission depending on the agenda and current issues.
(Photo: Courtesy of the Ministry of Planning and Budget, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.