First Korean Economic Briefing Since Inauguration in New York
Senior Executives from Blackstone, JP Morgan Attend
Choi Sang-mok, Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance, stated, "With Korea's inclusion in the World Government Bond Index (WGBI) resolving the 'Korea discount' in the foreign exchange and bond markets, we will steadfastly pursue value-up support measures to ensure the stock market receives its proper valuation."
Deputy Prime Minister Choi visited New York for the first time since Korea's inclusion in the WGBI and held a Korean economic briefing (IR) for global investors on the 22nd (local time). The IR was attended by senior executives from global asset management firms and investment banks (IB) such as Blackstone, Prudential, Morgan Stanley, BBH, JP Morgan, and Bank of New York Mellon, with a small group of about 10 people to facilitate substantive discussions. This was the first time Deputy Prime Minister Choi held a Korean economic IR targeting global investors since his appointment.
Regarding Korea's inclusion in the WGBI, he said, "I believe this is the result of the international community recognizing Korea's economic credibility and its efforts to improve accessibility for foreign investors over time. Since a comprehensive review is scheduled for March next year, we will ensure that the institutional improvements made so far are effectively implemented through close communication with global investors."
On the key challenge factors for the Korean economy, such as the US-China conflict, he emphasized, "Korea is minimizing damage to Korean companies on major trade issues like the Inflation Reduction Act (IRA) and the CHIPS Act through a strong Korea-US alliance and smooth relations with the US government. Regarding China, we will resolve issues in a way that benefits the national interests of both countries based on close mutual cooperation."
In response to questions about AI innovation policies, he replied, "We will concentrate national capabilities to utilize AI as a core future growth engine, centered on the Presidential-led ‘National AI Committee.’" Regarding the question about the necessity of nuclear power for AI power supply, he stated, "To achieve carbon neutrality and effectively supply power needed by industries, we will maximize the expansion of renewable energy while dramatically increasing the share of zero-carbon energy generation such as nuclear power and hydrogen."
Choi Sang-mok, Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance, is answering investors' questions at the Korea Economic Briefing held at the Lotte Palace Hotel in New York, USA, on the 22nd (local time).
The government also presented a detailed diagnosis of the Korean economy during the IR. First, it assessed that the Korean economy has been on a recovery trend since the fourth quarter of last year, with domestic demand improvements becoming more visible in the second half of the year. Considering the easing of inflation, improved real purchasing power of households due to wage increases, and the Bank of Korea's pivot (policy shift) leading to interest rate cuts this month, it is expected that the previously sluggish private consumption will begin to show signs of recovery. The export boom is seen as following the usual recovery path, leading to improved corporate earnings, expanded facility investment, and increased real income.
Regarding external soundness, it was explained that Korea's foreign exchange reserves, like those of other major countries, have decreased somewhat since 2022 due to the strong dollar, but international organizations such as the International Monetary Fund (IMF) still assess the reserves as sufficient for crisis response. Furthermore, net external financial assets exceeding $800 billion, the highest-ever national credit rating, and the successful issuance of foreign currency bonds in June are cited as evidence of Korea's robust external soundness.
Finally, concerning debt issues, it was diagnosed that the household debt-to-GDP ratio has declined for the first time since 2004, and external debt soundness indicators remain at a favorable level, indicating that overall economic debt is being managed stably.
After the IR, Deputy Prime Minister Choi will move to Washington D.C. to attend the G20 Finance Ministers and Central Bank Governors Meeting and the World Bank (WB) Development Committee Meeting from the 23rd to the 25th. At these events, he will meet with finance ministers from major countries, including the IMF and WB, to discuss cooperation measures.
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