Financial Services Commission Reviews Financial Market Issues: "Global Economic Downside Risks Increasing"

'Financial Market Issue Review and Communication Meeting' Held
Korean Economy Equipped with Fundamental Strength and Resilience

Kim So-young, Vice Chairman of the Financial Services Commission, stated on the 10th, "The global political and economic order is rapidly shifting, which could negatively impact the real economy and investment sentiment."

The Financial Services Commission announced that on the morning of the same day, it held a financial market issue review and communication meeting chaired by Vice Chairman Kim So-young, where market experts discussed future response directions.

Vice Chairman Kim predicted, "It is difficult to predict the ultimate outcome of the global order transition, but in the short term, it may slow down the global real economy, increase inflationary pressures, and dampen risk asset investment sentiment."

She added, "Since our economy and financial markets cannot avoid being affected by these factors, we will closely monitor global capital flows and market conditions and continue efforts to stabilize the market with a high level of vigilance."

At the meeting, participants assessed that our economy and financial markets now possess the fundamental strength and resilience to absorb a certain degree of external shocks. This means the likelihood of a sudden economic and financial crisis like the past International Monetary Fund (IMF) crisis has significantly decreased.

However, concerns were raised about the gradual weakening of overall economic growth momentum. There is a growing forecast that our economy's potential growth rate will fall below 2% within the next few years, and this year's growth rate is expected to remain in the mid-1% range. To overcome this, it was advised to strengthen public-private joint efforts to expand growth drivers through structural reforms and other measures.

Vice Chairman Kim So-young emphasized, "Our economy has experience successfully responding to changes during the 2000s when the global economic order was shifting due to China's integration into the world economy, the spread of free trade, and the formation of global value chains. However, on the other hand, it still remains stuck in industries and methods that were successful in the past," adding, "We must prepare for challenges to adapt to new conditions."

She continued, "The essence of finance is to assume and manage risks that arise in the process of supplying funds," and "strengthening the role of finance for economic growth is the government's consistent goal."