Chair of UK Budget Responsibility Committee and OECD Expert: "Legislation Needed for Korea's Fiscal Rules"

Meeting with Choi Sang-dae, 2nd Vice Minister of the Ministry of Economy and Finance
Consensus on Strengthening Cooperation for OECD and Public Institution Management Development

[Asia Economy Reporter Joo Sang-don] The Ministry of Economy and Finance announced on the 12th that Vice Minister Choi Sang-dae met with Richard Hughes, Chair of the UK Office for Budget Responsibility (OBR), and Yoshiki Takeuchi, OECD Deputy Secretary-General, during the National Debt Investors Roundtable. They unanimously emphasized the necessity of legislating fiscal rules in Korea.

First, on the 8th, Vice Minister Choi held a meeting with Richard Hughes, Chair of the UK OBR, to exchange views on Korea's fiscal rules introduction plan, the UK's experience in operating fiscal rules, and fiscal risk analysis.

According to the Ministry of Economy and Finance, Chair Hughes evaluated that Korea's fiscal rules are designed to be simple yet effectively binding to control the pace of debt increase. However, he stated that legislation is essential to ensure compliance with the rules and that prior analysis and response to fiscal risks are important.

At the meeting, Vice Minister Choi said, "To guarantee compliance with fiscal rules, it is important to institutionalize continuous monitoring of various fiscal soundness indicators and prior analysis of fiscal risk factors, as done in the UK." He added, "Korea plans to establish a Sustainable Fiscal Management Framework (SFMF) capable of early warning on fiscal risks within this year."

Subsequently, on the 9th, Vice Minister Choi met with OECD Deputy Secretary-General Yoshiki Takeuchi to discuss ways to expand Korea-OECD fiscal cooperation. They agreed to expand the Korea-OECD high-level cooperation channel by establishing a Public Institution Policy International Forum. The first forum is scheduled to be held in Paris in April. Through this, Korea’s excellent public institution policies and major countries’ cases will be shared, and Korea is expected to play a pivotal role in revising the 'OECD Guidelines on Corporate Governance of State-Owned Enterprises.'

Additionally, on the 10th, Vice Minister Choi attended the OECD Long-term Fiscal Projections and Fiscal Reform Seminar, where he discussed 'Korea’s Fiscal Vision 2050' and major countries’ fiscal reform cases with OECD fiscal experts and member country delegations.

The participants highly evaluated Korea’s proactive pursuit of long-term fiscal reforms to ensure fiscal sustainability despite challenging conditions such as high inflation, high interest rates, and economic slowdown. They also agreed on the need to promptly legislate fiscal rules for sustainable finance. In response, Vice Minister Choi stated, "The 'Fiscal Vision 2050' will be finalized in the first half of this year, and we will share the progress internationally through the 'Korea-OECD International Fiscal Forum' scheduled for September."