[Economic Outlook] LH Announces Last Year's Management Evaluation... Focus on Monetary Policy Committee Minutes

2020 Public Institution Management Performance Evaluation, etc.

[Sejong=Asia Economy Reporter Moon Chaeseok] This week, the evaluation results of the management performance of public enterprises such as Korea Land and Housing Corporation (LH) for last year will be released. The minutes of the Monetary Policy Committee meeting held last month will also be disclosed.

First, the government will announce the results of the '2020 Public Institution Management Performance Evaluation' on the 18th. The management performance evaluation is a procedure to assess the management performance of public enterprises and quasi-governmental institutions for the previous year. Depending on the evaluation results, the tenure of the heads of institutions and the performance bonuses of executives and employees will vary.

This year, the evaluation results of LH, which caused public outrage due to speculation in the 3rd phase new towns, are drawing attention.

The government has previously announced its policy to conduct a 'strict' management evaluation of LH last year. It also stated that it may revise past management evaluation results by reflecting the ongoing investigations and inquiries.

The Bank of Korea will release the minutes of the Monetary Policy Committee meeting held on May 27 on the 15th. At this meeting, the committee unanimously decided to keep the base interest rate unchanged for the eighth time since July last year.

Through the minutes, attention will focus on how strongly each committee member expressed concerns about so-called 'financial imbalances' such as the increase in household debt during the discussion process, and whether they mentioned the need to prepare for an interest rate hike. Since Bank of Korea Governor Lee Ju-yeol hinted at the possibility of a rate increase within the year twice recently, more eyes are on the contents of the minutes.

On the same day, the Bank of Korea will also announce the 'Monetary and Liquidity Statistics for April.' Previously, the broad money supply (M2 basis) in March was 3,313.1 trillion won, an increase of 3.87 trillion won (1.2%) from February, continuing the record-high trend. It was 11% higher than a year ago. Since the increase in household loans is not easily slowing down, it is presumed that market liquidity in April also expanded significantly.

Meanwhile, the announcement of the government's economic policy direction for the second half of the year is approaching. The government presents the mitigation of the K-shaped polarization caused by the COVID-19 crisis as a top priority. It is also mindful of preparing for potential risk factors such as inflation, household debt, real estate, and asset concentration.