Acting Finance Minister Says Soaring Household Debt Makes Lending Regulations Unavoidable

Avoids Direct Answer on Fiscal Rule Abandonment Controversy
Says "It Depends on Management"

Lee Hyungil, First Vice Minister and Acting Minister of Strategy and Finance, is greeting members of the National Assembly at the plenary session of the Budget and Accounts Committee held at the National Assembly on June 30, 2025. Photo by Kim Hyunmin

Lee Hyungil, First Vice Minister and Acting Minister of Strategy and Finance, stated regarding the 6·27 real estate measures, "Household debt is increasing very rapidly, which poses challenges to overall financial soundness. Therefore, these measures were implemented out of necessity."

At the plenary session of the National Assembly’s Planning and Finance Committee on July 1, Lee explained, "This policy was implemented to block excessive demand."

He also added, "In fact, regulations that were relaxed during the period of rising interest rates should be reinstated as interest rates decline, but since this has not been done, we included these additional measures as part of normalization."

Regarding criticism that the government has actually created an opportunity for foreigners, including Chinese nationals, to go on a housing shopping spree by not subjecting them to these regulations, he responded, "We will look into it further."

When asked whether there had been prior coordination with the Presidential Office, he replied, "Coordination has taken place."

On the controversy over the Lee Jaemyung administration's decision to abandon the legislation of the 3% fiscal rule, Lee said, "If the National Assembly opens the floor for discussion, we will actively participate," adding, "Fiscal sustainability can be achieved through various means."

When asked whether the country’s fiscal capacity is sufficient to do without a fiscal rule, he avoided a direct answer, saying, "It depends on how it is managed."

Previously, the Ministry of Strategy and Finance sparked controversy by deleting the phrase "continued pursuit of fiscal rule legislation" from the "Fiscal Aggregate Effects and Management Plan of the National Fiscal Management Plan," which was submitted to the National Assembly along with the second supplementary budget proposal.