[2025 Audit] Rhee Changyong: "Cash Support Should Be Selectively Focused on Vulnerable Groups"

On October 29, Bank of Korea Governor Rhee Changyong stated that cash-equivalent support measures, such as consumption coupons, "should be implemented selectively, focusing on vulnerable groups."

Yonhap News Agency

Governor Rhee made these remarks while attending a comprehensive parliamentary audit by the National Assembly's Strategy and Finance Committee on the same day.

In response to a comment by Assemblyman Park Sunghoon of the People Power Party, who pointed out that "while basic income may have had a short-term effect in boosting consumption, it has failed to lead to sustainable productivity growth and could structurally undermine South Korea's economic growth rate," Governor Rhee said, "All mainstream economists agree with this view."

Governor Rhee continued, "The Bank of Korea has conducted several studies on this topic. The idea behind basic income is to consolidate various subsidies into a single, unified basic income. However, in practice, existing expenditures are typically maintained, and basic income is added on top, which means there is no fiscal room. This is the biggest problem."

Regarding concerns that the government might request the Bank of Korea to purchase government bonds to expand fiscal spending, Governor Rhee said, "The law allows for this, but it has become a dead letter and has rarely been used. The government has never made such a request."

In response to the observation that "if government bonds are issued to expand fiscal spending, bond yields will inevitably rise, which could conflict with monetary policy measures such as the Bank of Korea's easing stance," Governor Rhee stated, "When determining fiscal spending, we must assess the annual volume of bond issuance and related factors."