Choo Kyung-ho: "Uncertainty Remains High After SVB Closure... Closely Monitoring Situation Changes"

Export Investment Officer Meeting
Review of Export Trends and Discussion on Additional Support Measures

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho stated on the 13th, "Given the significant uncertainty surrounding the future repercussions of the closure of the U.S. Silicon Valley Bank (SVB), we will closely monitor changes in market conditions and respond swiftly if necessary."

On the same day, Deputy Prime Minister Choo presided over the Export Investment Responsibility Officers' Meeting at the Government Complex Sejong, saying, "Since the news of SVB's closure broke last weekend, volatility and uncertainty in domestic and international financial markets have increased."

Deputy Prime Minister for Economy Choo Kyung-ho is delivering opening remarks at the Emergency Economic Measures Meeting held at the Government Seoul Office Building on the 8th. Photo by Dongju Yoon doso7@

He added, "Many believe that this incident has not yet spread as a risk to the global financial and economic system and that its impact will be limited. Although relevant authorities, including the U.S. Treasury Department, announced measures this morning to fully protect SVB deposits and are responding promptly, we will strengthen real-time monitoring in cooperation with related agencies to minimize any negative effects on our financial markets and real economy."

Deputy Prime Minister Choo continued, "The global economy is currently experiencing ongoing volatility due to high-intensity financial tightening aimed at combating high inflation. Since difficulties in our economy and financial sectors may persist for some time, the government will remain vigilant at all times and devote all efforts to overcoming the current crisis."

On this day, Deputy Prime Minister Choo discussed with relevant ministries the "inspection of export trends by major items and additional support measures." Recently, exports have been declining for five consecutive months since October last year due to sluggishness in major IT items such as semiconductors and exports to China. Exports from March 1 to 10 also showed a 16.2% decrease compared to the same period last year, indicating a sluggish trend.

Deputy Prime Minister Choo explained, "To ensure that exports, a core growth engine of our economy, rebound quickly and that this year's positive export target is achieved, we have closely reviewed export trends by major items and the progress of support measures with export investment responsibility officers composed of first-level officials from each ministry, and prepared additional support plans related to major items and export support infrastructure."

First, in response to the recent increase in orders in the shipbuilding industry, the government plans to expand financial support from KDB Industrial Bank and Korea Eximbank and to raise the special guarantee ratio (currently 70-85%) for advance payment refund guarantees (RG) provided by the Korea Trade Insurance Corporation. The government will prepare and announce detailed measures to strengthen support within this month.

To expand tax support for investments in the future car sector, the government is considering designating core future car technologies as new growth and original technologies under the Restriction of Special Taxation Act. Additionally, to address the recent shortage of dedicated car carriers for export vehicles, the government plans to actively encourage domestic automakers to be allocated available shipping capacity first.

For small and medium-sized equipment companies that have signed export contracts for nuclear power plant projects, preferential conditions for export credit insurance will be provided. Furthermore, comprehensive support measures to expand overseas advancement of green industries, such as environmental plant orders, will be announced in the second quarter of this year.

To strengthen export support infrastructure, a policy finance program worth 2 trillion won (through the Korea Development Bank) offering interest rate discounts of up to 0.6 percentage points will be newly established and supplied within this month to alleviate financing difficulties faced by small and medium-sized export companies. This will expand trade finance to a maximum of 364.5 trillion won this year.

Deputy Prime Minister Choo emphasized, "Exports are the key driving force to overcome the crisis," and said, "We will listen more closely to voices from the field and continuously discover and improve practical, field-experienced tasks that can truly help export companies, thereby promptly resolving difficulties faced on the ground."