"Managing Real Estate to Prevent Excessive Return Expectations"
"US Investment of $350 Billion Is a 'Cap' Concept"
On August 27, Deputy Prime Minister and Minister of Economy and Finance Koo Yoonchul stated that if the government’s “Ultra-Innovative Economic Project” is realized, “the KOSPI index could surpass 5,000.”
Appearing on the YouTube channel “Man Reading Economy (Kim Kwangseok TV)” that day, Deputy Prime Minister Koo responded to the question, “Have you given up on the KOSPI 5000 target?” by saying, “No,” and provided this explanation.
On the 27th, Deputy Prime Minister and Minister of Economy and Finance Koo Yoonchul appeared on the YouTube channel "Man Reading Economy (Kim Kwangseok TV)." Screenshot from YouTube.
Regarding his recent misstatement about the price-to-book ratio (PBR), he said, “I apologize for any misunderstandings,” and added, “I am strongly committed to revitalizing the capital market.”
Deputy Prime Minister Koo emphasized, “The role of the Deputy Prime Minister for Economic Affairs is to take responsibility for the economy,” and continued, “The economy thrives when businesses thrive. How can we revive businesses and the economy without respecting the capital market?”
He also addressed the real estate market. He stated, “The policy goal is to stabilize the real estate market,” and added, “We will manage it so that there are no excessive expectations for returns.” He further mentioned that, following demand management measures such as the June 27 lending restrictions, supply-side policies are also being prepared.
Deputy Prime Minister Koo also declared, “If investing in the capital market based on corporate competitiveness offers higher expected returns, people will not move to the real estate market even if encouraged to do so,” and added, “If people can earn returns through asset investment, we will ensure they can live comfortably on capital income in addition to earned income for the rest of their lives.”
Regarding the $350 billion (approximately 490 trillion won) investment in the United States, he explained, “It is a cap concept,” and said, “The pace and projects of the investment will be discussed with the United States and carried out sequentially.” Addressing some criticism that the government is “giving away to the U.S.,” he drew a clear line, emphasizing, “We are conducting business in the U.S., recovering principal and interest, and sharing the profits with the United States.”
On concerns about the recent employment crisis stemming from restructuring in the petrochemical industry, he said, “Restructuring, put differently, is about enhancing competitiveness,” and added, “We will strengthen the industry’s competitiveness, and if there are citizens who lose jobs in the process, we will respond with the national safety net and provide job transition training toward new industries and new technologies.”
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