Hong Nam-gi Attending G20: "Need to Adjust Speed of Monetary Policy Normalization According to Economic Conditions"

[Image source=Yonhap News]

[Asia Economy Washington (USA) = Reporter Kwon Haeyoung] Hong Namgi, Deputy Prime Minister and Minister of Economy and Finance, stated on the 20th (local time) that "the scope and speed of monetary policy normalization should be adjusted according to economic conditions."

Deputy Prime Minister Hong attended the G20 Finance Ministers meeting held in Washington DC, USA, and said, "Thorough analysis and international response to the transmission channels of the Ukraine war are necessary." On this day, Hong presented measures to respond to global economic risks and conveyed the Korean government's position on enhancing the international financial system's safety net and resilience.

He emphasized, "Fiscal policy must serve as a robust social safety net," and urged, "Policy support is needed to strengthen medium- to long-term growth engines such as green and digital transitions to ensure that the scars of the pandemic and war do not remain."

Additionally, Deputy Prime Minister Hong stressed the need to establish guidelines that clarify the procedures and deadlines for debt restructuring in low-income countries to strengthen support for vulnerable nations. He welcomed the establishment of the Recovery and Sustainability Trust (RST), led by the International Monetary Fund (IMF), in early May, reaffirmed Korea's contribution pledge (900 million Special Drawing Rights), and urged active participation.

He also emphasized that efforts to expand the lending capacity of multilateral development banks to low-income countries must yield effective results.

Furthermore, he requested that the G20 meeting serve as a platform for inter-country compromise and agreement to promote discussions so that the IMF quota general review, which has a deadline of December 2023, can be completed within the timeframe.

This G20 Finance Ministers meeting was the first held since Russia's invasion of Ukraine. It was convened considering the importance of the G20 meeting in coordinating policies among countries despite difficult circumstances such as controversies over Russia's membership status.

An official from the Ministry of Economy and Finance stated, "Member countries shared the recognition that the momentum for global economic recovery has significantly weakened due to the recent Ukraine situation, and agreed on the necessity of G20-level policy cooperation to enhance economic resilience," adding, "They also agreed that ongoing tasks such as strengthening global pandemic response funding and governance, alleviating debt burdens of vulnerable countries, and supplementing the global financial safety net must proceed without setbacks."