Urgent Report from International Financial Center on Middle East Tensions
'Investment Activation Ministerial Meeting' Launched for Support
Increasing Public Construction Investment and Managing Construction Cost Increases
Amid escalating risks of full-scale war in the Middle East, Choi Sang-mok, Deputy Prime Minister and Minister of Economy and Finance, stated on the 2nd, "We will maintain a high level of vigilance and closely monitor the impact on financial markets and the real economy, responding swiftly in cooperation with relevant agencies if necessary."
On the same day, while presiding over the Economic Ministers' Meeting at the Government Seoul Office, Deputy Prime Minister Choi said in his opening remarks, "Early this morning, Iran launched missile attacks toward Israel, heightening tensions in the Middle East region and increasing volatility in global stock markets and international oil prices."
Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok is presiding over the 'Economic Ministers' Meeting and the 1st Investment Activation Ministers' Meeting' held at the Government Seoul Office in Jongno-gu, Seoul on the 2nd, delivering opening remarks. / Photo by Ministry of Economy and Finance
At the meeting, an official from the International Finance Center attended unexpectedly and reported on the movements of global stock markets due to rising tensions in the Middle East. On the 1st (local time), Iran launched hundreds of large-scale ballistic missile attacks against Israel, causing international oil prices to surge by over 3%. As a result, the U.S. stock market also closed sharply down.
Regarding consumer prices this month, Deputy Prime Minister Choi said, "They have entered the 1% range, showing signs of downward stabilization," adding, "Given the persistent uncertainties such as increased volatility in international oil prices and rising agricultural product prices due to abnormal weather, we will remain vigilant and do our best to stabilize prices."
He also explained, "The economy continues to recover above the potential growth rate, supported by strong exports, but domestic demand is recovering relatively slowly, with varying degrees of recovery across sectors," and added, "We plan to accelerate domestic demand recovery by concentrating the capabilities of all ministries and implementing 'sector-specific tailored measures' for domestic demand."
The meeting also discussed measures including ▲ responding to the domestic economy ▲ stabilizing construction costs ▲ venture investment ▲ revitalizing private investment ▲ customized financial support for vulnerable groups ▲ and advancing the smart manufacturing innovation ecosystem.
Deputy Prime Minister Choi said, "Today, we launched the 'Investment Activation Ministers' Meeting' to discuss various measures to accelerate investment recovery," adding, "We will support through a two-track approach to promote the execution of planned projects and strengthen corporate investment capacity."
He continued, "To compensate for sluggish construction orders, we will push for additional public institution investments worth 8 trillion won in the second half of the year, while aiming to expand private investment by 30 trillion won over the next five years by increasing private capital inflow and rationalizing regulations."
He also stated, "We plan to manage construction cost increase rates at around 2% for 2025 and 2026," and added, "To revitalize regional construction markets, we will temporarily extend the period for excluding unsold houses after completion from the comprehensive real estate tax aggregation from the current 5 years to 7 years."
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