Kwon Seong-dong, Floor Leader, Visits Bank of Korea for Direct Talks
Governor Lee Expresses Concerns Over Economic Instability
Gap on Supplementary Budget Narrows, But...
Lee: "Plans Must Be Clarified" vs. Kwon: "Early Budget Execution First"
On the 22nd, Lee Chang-yong, Governor of the Bank of Korea, met with Kwon Seong-dong, floor leader of the People Power Party, and expressed concerns that the recent economic situation has become quite unstable due to political shocks. He also stated that plans regarding the supplementary budget (Chugyeong) issue, where there are differences in opinion, need to be clarified. Regarding his recent messages about the overall economy, he said that they were not intended with politics in mind.
People Power Party Floor Leader Kwon Seong-dong (right) visited the Bank of Korea in Jung-gu, Seoul on the 22nd to review the economic situation and discuss current issues, and is moving to the meeting room with Lee Chang-yong, Governor of the Bank of Korea. Photo by Yonhap News
That afternoon, Governor Lee met with Floor Leader Kwon at the Bank of Korea in Jung-gu, Seoul, to discuss recent economic conditions such as economic growth, inflation, and exchange rates.
It is unusual for the ruling party’s floor leader to visit the Bank of Korea and meet the governor in person. In his opening remarks, Floor Leader Kwon explained the background, saying, "Due to increased domestic and international uncertainties caused by political instability in the political sphere, the inauguration of the Trump administration in the U.S., and political instability in France and Germany, I wanted to hear about these issues. Recently, I have been actively voicing various opinions to the government and political circles, and I came to have an honest conversation to understand the underlying reasons."
This statement appears to be mindful of the differences in stance regarding the supplementary budget. The People Power Party holds the view that early execution of the budget is more important than forming a supplementary budget, whereas Governor Lee has advocated for a supplementary budget in the range of 15 to 20 trillion won. At the Monetary Policy Meeting of the Monetary Policy Board on the 16th, Governor Lee said, "Consumption and domestic demand have fallen more than expected, and due to factors such as martial law, the economic growth rate for the fourth quarter of last year may fall below 0.2%. Besides monetary policy, a supplementary budget to complement this is necessary."
According to Park Soo-min, spokesperson for the People Power Party floor, Governor Lee provided an explanation regarding his remarks on the supplementary budget during the meeting. Spokesperson Park said, "I understood that Governor Lee’s comments were not about pushing for the supplementary budget first, but rather that having a clear plan for the supplementary budget would be good for external credibility. Since it takes time to execute the supplementary budget and considering the second half of this year, there is a need for the supplementary budget, so it seems to have been interpreted as meaning 'as soon as possible.' However, there is a gap between this and the actual position of the Bank of Korea governor." He added, "The party’s position that early budget execution is important for people’s livelihood and the economy has not changed," but also said, "I believe the governor’s thoughts are not very different."
Spokesperson Park also stated that Governor Lee conveyed concerns about the recent economic situation during the meeting. He said, "Due to external shocks and political shocks, the economy has become very unstable and the economy is somewhat stagnant, and the Bank of Korea governor expressed worries about this. The party empathized and conveyed the goal of quickly stabilizing the political situation and the administration." On the same day, the Bank of Korea delivered a report titled 'Assessment of the International Economic Situation' to members of the People Power Party. It is also reported that Lee Ji-ho, director of the Research Department, and Yoon Kyung-soo, director of the International Department, briefly reported on domestic growth, inflation, and the foreign exchange market.
While the People Power Party has expressed discomfort with Governor Lee’s recent critical stance on the overall economy, it was said that many misunderstandings were resolved during the meeting. Spokesperson Park evaluated, "He is voicing necessary opinions on various fields of our country’s economic situation, and this is viewed positively. There were also remarks that the Bank of Korea’s independence is respected and that such actions are naturally possible. Since Governor Lee also said at today’s meeting that he has no intention of engaging in politics, it was a meeting where many parts were understood and thoughts were organized."
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