Lee Chang-yong "Inflation to Converge to 2% Target by End of Next Year... Concerns Over Low Growth Due to High Interest Rates and Low Birthrate"

Interview with CNBC in Morocco
"IMF's 2.2% Growth Forecast Similar to Bank of Korea's View"

Lee Chang-yong, Governor of the Bank of Korea, said in an interview with the US CNBC on the 11th (local time) that "the inflation rate in our country is expected to fall to the low 3% range by the end of this year and converge to the target level (2%) by the end of next year."

Lee Chang-yong, Governor of the Bank of Korea, during an interview with the US CNBC. / Screenshot from CNBC

Governor Lee made these remarks in an interview held in Marrakech, Morocco, where he visited to attend the G20 Finance Ministers and Central Bank Governors Meeting and the joint annual meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG).

Regarding South Korea's economic growth rate, Governor Lee said, "The IMF has projected a growth rate of 2.2% for next year, which is similar to the Bank of Korea's view," adding, "The variables are the rebound of the Chinese economy and oil prices."

On South Korea being affected by the global factor of prolonged high interest rates, he predicted, "It may not be a typical case."

Governor Lee expressed concern about the high possibility of a long-term recession due to the prolonged high interest rate environment and aging population. He said, "We need to see how the factor of prolonged high interest rates and the reduction of growth potential caused by low birth rates and aging will interact."

Regarding the debate on the neutral interest rate, he responded, "Globally, there has been ongoing discussion about preparing for a new high interest rate regime for a long time," adding, "However, South Korea must consider the special factor of its rapidly aging population structure due to a very low birth rate."