Regular Press Briefing with Reporters on the 25th
Loan Decline This Month... Positive Signal
Public Utility Price Hikes Require National Consensus
"Abolishing Financial Investment Income Tax Is the Right Move"
Prime Minister Han Duck-soo stated that to resolve the issue of overheating in the real estate market, it is more appropriate to pursue economic policies through adjustments such as the Loan-to-Value ratio (LTV) or the Debt Service Ratio (DSR) rather than interest rate adjustments. Regarding the delay in the introduction of the Stress DSR Phase 2, he evaluated that "postponing it was a well-made policy decision," while explaining that considering the increase in household debt last month, the introduction this month was clearly decided.
Prime Minister Han Duck-soo is speaking at the regular back briefing with the press corps held at the Government Complex Sejong on the 25th. [Image source=Yonhap News]
At a regular briefing with the press corps held at the Government Complex Sejong on the 25th, Prime Minister Han said, "The government's policy priority is stabilizing real estate prices," adding, "The way to achieve this is by increasing supply." He continued, "We have announced related measures several times and will expand supply as quickly as possible," reiterating the government's stance. He also explained that to improve real estate loan regulations, the government will persuade the National Assembly to promptly process related bills.
Prime Minister Han further stated, "It is a well-established theory that trying to control real estate demand through general interest rates in financial policy can have unexpected effects on the overall economy and is therefore undesirable." He added, "Adjusting the LTV figures focused on housing real estate or strengthening or easing the DSR is the orthodox economic policy."
Regarding the criticism that the Stress DSR Phase 2 regulation, which has been in effect since the 1st, should have been implemented earlier, Prime Minister Han evaluated that "postponing it was a well-made policy." He explained, "Because DSR was not applied in August, household debt increased significantly," adding, "We clearly realized this then and have been firmly implementing the policy since this month." He also mentioned, "The reduction in loans, including household debt, since this month is a positive signal."
Regarding discussions on interest rate cuts, he said, "The Monetary Policy Committee will meet in October, and I believe the Bank of Korea and the Monetary Policy Committee will independently judge and decide based on comprehensive economic conditions."
Prime Minister Han mentioned that although the financial investment income tax is a more sensitive issue than the comprehensive real estate tax, he agreed with the government's position that "abolishing it is the right course." Regarding value-up policies to resolve the Korea discount, he explained, "This policy is not the end; related policies will continue," adding, "We must also align with international standards and maintain ongoing efforts."
Regarding concerns about public institution debt and discussions on rate increases, he expressed a cautious stance but acknowledged the inevitability of the situation. He said, "Energy prices should change according to overseas energy prices, but now we have no choice but to proceed cautiously," adding, "A national consensus will be necessary." He also explained, "I think it will be difficult to continue like this."
Prime Minister Han Duck-soo is speaking at the regular back briefing with the press corps held at the Government Complex Sejong on the 25th. [Photo by Yonhap News]
He reaffirmed a strong stance on medical reform. Prime Minister Han said, "Halting medical reform would be a dereliction of duty regarding Article 36, Paragraph 3 of the Constitution, which states that all citizens are protected by the government concerning health."
However, he left the door open for discussion, saying, "Since the plan to increase medical school admissions is considered unreasonable in reality, if the medical community comes up with a scientific proposal, we can discuss it together." Requesting the medical community's swift return, he explained, "When they come back, we want to have an open and frank discussion." He also expressed willingness to consider discussions in a consultative body involving opposition parties outside the government, stating, "If there is a formal proposal, we will review it."
Regarding former Presidential Chief of Staff Lim Jong-seok's so-called 'two-state theory' advocated last week, he criticized it as "a truly mistaken idea" and "a violation of the Constitution." He sharply stated, "Article 3 of the Constitution specifies how unification should be achieved, so on what grounds do they propose living separately?"
Earlier, in his opening remarks, Prime Minister Han evaluated, "Overall, the economy is holding up well," and said, "It seems that economic recovery is progressing sustainably." He added, "It is important to properly implement the 4+1 reforms (pension, medical, education, labor + low birthrate) to raise growth potential," and noted, "The current potential growth rate is about 2%, and reforms should be directed toward increasing this."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
