Meeting with 1st Vice Minister of Ministry of Economy and Finance Ahead of Annual Consultation Announcement
"Domestic Demand Recovery and Export Growth Momentum Expected to Ease"
The International Monetary Fund (IMF) forecasted that South Korea's export momentum will ease next year, projecting growth at the level of potential growth rate.
On the 19th, Kim Beom-seok, First Vice Minister of the Ministry of Economy and Finance, met with the IMF Korea mission team, which visited South Korea on the 7th for the annual consultation. The annual consultation is a meeting held every year under the IMF agreement to review the overall economic situation of member countries, including macroeconomics, fiscal, and financial conditions. The results of the annual consultation are later approved by the board and published as country reports.
Rahul Anand, the mission chief, explained the results of the two-week annual consultation to Vice Minister Kim and spent time exchanging views on key issues. He said, "South Korea's economy, with solid economic fundamentals, has wisely overcome various global shocks through appropriate macroeconomic policies," and forecasted that "next year, as domestic demand gradually recovers, export growth momentum will ease, resulting in growth at the level of potential growth rate."
Regarding the inauguration of the new U.S. administration, he mentioned that "the South Korean government has an appropriate and swift response system in place." He also recommended strengthening innovation and diversifying export markets to maintain export competitiveness amid the changing trade environment. Furthermore, he evaluated that "recent efforts to improve the foreign exchange market structure and the inclusion in the World Government Bond Index (WGBI), which expanded trading volume and participants, will contribute to volatility reduction in the future."
The mission chief also emphasized, "We welcome the sound fiscal stance and expenditure restructuring in next year's budget, and considering future fiscal demands due to aging, it is necessary to secure fiscal capacity through more proactive sound fiscal management." He positively evaluated the South Korean government's recent pension reform initiatives and efforts to legislate fiscal rules.
Vice Minister Kim agreed with the mission chief's overall assessment of the South Korean economy. He stated, "Despite difficult conditions such as increased external uncertainties, the South Korean government will do its utmost to maintain a stable recovery trend."
The results of this year's IMF annual consultation will be announced at 10 a.m. on the 20th.
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