Choi Sang Mok, Deputy Prime Minister and Minister of Economy and Finance, drew a line against the opposition’s demand for additional supplementary budget allocation, stating, “Given the country’s growth rate outlook, the role of fiscal policy is to provide support to targeted groups, focusing on people’s livelihoods and socially disadvantaged.”
Deputy Prime Minister Choi, who is visiting the U.S. to attend the annual meetings of the IMF and WB, expressed this position during a meeting with reporters at the IMF headquarters in Washington, D.C.
He emphasized, “Supplementary budgets are typically implemented in case of economic downturns. The role of fiscal policy lies more in improving people’s livelihoods than responding to economic downturns.”
Regarding recent inflationary conditions, he stated, “Initially, we expected the Consumer Price Index (CPI) to fluctuate around 3% in the first half of the year and stabilize in the low to mid 2% range in the second half.” He further explained, “While there are many uncertainties and various factors to consider, the core inflation remains stable. Therefore, our initial forecast that inflation will stabilize downwards in the year’s second half is still valid.”
About the won-dollar exchange rate, which is causing anxiety as it fluctuates in the 1,400 won range, Deputy Prime Minister Choi said, “We are closely monitoring the situation and have plans to respond accordingly. We send messages to the foreign exchange market through international cooperation if necessary. This time, a meeting with the Japanese Finance Minister and a meeting of finance ministers from South Korea, the U.S., and Japan is part of it.”
On the need for currency swaps, he said, “Currency swaps are a response to a lack of liquidity,” adding, “But right now, the foreign exchange market is not driven by a lack of liquidity, but by the global economic environment.”
When asked if there was any discussion about countering China at the South Korea-US-Japan Finance Ministers’ meeting, he said, “What was discussed at the South Korea-US-Japan Finance Ministers’ meeting is not to exclude any particular country, but to share our awareness and respond to the challenges that all three countries are facing in common.”
He continued, “China is our largest trading partner, so we must strengthen our economic cooperation with China. We are in talks to hold a meeting of Korean and Chinese economic ministers this year.”
In response to concerns that the party’s defeat in the general election will make it difficult for the National Assembly to pass priority legislation, he said, “The economic situation at home and abroad is uncertain, but in times like this, the government needs to be more clear on the policy framework of putting people’s livelihoods first.”
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