Choo Kyung-ho: "Once Prices Stabilize, All Policy Directions Should Shift to Economic Growth"

[Image source=Yonhap News]

[Asia Economy Reporter Eunju Lee] Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho said, "Once price stability is firmly established, all policy stances should shift toward the economy."

At the monthly forum invitation event of the Editors' Meeting held on the 10th at the Press Center in Jung-gu, Seoul, Deputy Prime Minister Choo emphasized, "We are gradually moving into a situation where we need to pay attention to economic issues," adding, "This year, we need to focus on both prices and the economy."

He stated, "The effects of interest rate policies appear with a time lag," and added, "Because last year's inflation rate was very high, we also raised interest rates sharply, but this year, to prevent economic slowdown, we need to flexibly manage the macro policy mix."

Furthermore, he forecasted that inflation would fall to the 3% range within this year. He said, "Currently, the inflation rate is in the 5% range; it will drop to the 4% range in the first half of the year and to the 3% range in the second half, recording 3.5%," and added, "The inflation figures will improve more than expected and will continue on a downward trend."

He also explained, "From a macro perspective, we will still focus on price stability for the time being," and said, "We plan to concentrate fiscal spending in the first half to prevent stagnation and to manage inflation."

Regarding the real estate market, he said, "Since prices have surged significantly, a certain degree of market adjustment is inevitable," adding, "However, if this adjustment happens abruptly, it could shock various parts of the market, so we will adjust policies to ensure a soft landing." He further commented, "I think the real estate market adjustment will continue to some extent," but added, "However, it is difficult to predict to what degree and until when this will occur."

On government support measures to prevent the deterioration of real estate project financing (PF), he drew a clear line. He said, "The industry itself must make self-help efforts," and added, "The government cannot accept and sustain every case one by one." However, he noted, "For cases where projects are fundamentally sound but face liquidity risks due to market sentiment deterioration, we will resolve them through various programs."