[2024 National Audit] Lee Chang-yong "Economic Uncertainty Grows Due to Delayed Domestic Demand Recovery"

Lee Chang-yong, Governor of the Bank of Korea, "Economic Uncertainty Larger Than Expected"

Lee Chang-yong, Governor of the Bank of Korea

Lee Chang-yong, Governor of the Bank of Korea, stated that uncertainty in the South Korean economy has increased more than initially expected due to delayed domestic demand recovery.

At the National Assembly's Planning and Finance Committee audit on the 14th, Governor Lee said, "Looking at the domestic economic situation, it seems that a moderate growth trend will continue, but the uncertainty of the forecast path has increased more than initially expected due to the delayed recovery of domestic demand."

He explained, "The domestic economy has shown a clear stabilization in inflation rates, supported by the continued monetary tightening stance so far."

He added, "Considering low demand pressures, inflation is expected to maintain a stable trend going forward. However, there remains high uncertainty related to risks in the Middle East region and fluctuations in international oil prices."

Governor Lee emphasized, "From the perspective of financial stability, risks in the foreign exchange market have somewhat eased, and with the government's strengthening of macroprudential policies, the increase in household debt has begun to slow down. However, caution is still necessary as the easing of domestic and international financial conditions could act as a factor for household debt growth."

He mentioned, "Considering the overall economic situation, the Bank of Korea judged it appropriate to slightly reduce the degree of monetary policy tightening and monitor its effects, leading to a cut in the base interest rate from 3.5% to 3.25%."

He continued, "Future monetary policy will carefully examine the trade-offs among policy variables such as inflation, growth, and financial stability, and will prudently decide on the pace of future interest rate cuts."