▲ Attendees pose for a commemorative photo at the Expanded Macroeconomic and Financial Meeting held at the Government Complex Seoul on the 30th. From left: Minister of Planning and Budget Park Hong-keun, Deputy Prime Minister Lee Hyung-il, Bank of Korea Governor Shin Hyun-song, and Financial Services Commission Chairman Lee Eok-won.
The government plans to reduce the issuance volume of treasury bonds by utilizing tax revenue that has surged due to the semiconductor boom.
The Ministry of Economy and Finance announced this plan as Deputy Prime Minister and Minister of Economy and Finance Lee Hyung-il hosted an "Expanded Macroeconomic and Financial Meeting" at the Government Complex Seoul today (the 30th).
The meeting was attended by Minister of Planning and Budget Park Hong-keun, Bank of Korea Governor Shin Hyun-song, and Financial Services Commission Chairman Lee Eok-won.
This response comes as domestic bond yields have risen overall due to recent impacts such as rising oil prices and major countries shifting toward tight monetary policies.
The immediate scale of the reduction is expected to be revealed in the October treasury bond issuance plan to be announced the next day.
Some observers speculate that the figure will be around 10 trillion won.
The Ministry of Economy and Finance also plans to deploy market stabilization measures, such as emergency buybacks, if necessary.
Attendees at the meeting reportedly shared the view that the increased tax revenue resulting from the strong semiconductor performance should be used to alleviate polarization.
The ministry stated that they "agreed that the tax revenue, which is expected to increase by about 63.2 trillion won this year compared to the forecast made during the drafting of the extra budget in March, should be utilized strategically."
In particular, they reportedly gathered opinions that it is necessary to use the increased tax revenue in three core social policy areas closely related to people's livelihoods—housing, jobs, and livelihood finance—so that a rapid economic recovery can lead to the stabilization of people's livelihoods, and to use it as a catalyst for mitigating polarization.
Attendees evaluated that if fiscal resources are utilized to support vulnerable groups and foster future growth engines to expand growth potential, fiscal and monetary policies can complement each other.
The Ministry of Economy and Finance conveyed expectations that doing so could also contribute to raising potential growth rates and easing inflationary pressures in the mid-to-long term.
However, they diagnosed the current Korean economic situation as one where external uncertainties remain high, such as rising interest rates in major economies and geopolitical risks, and burdens on people's livelihoods persist.
This is the first time Deputy Prime Minister Lee has presided over the Expanded Macroeconomic and Financial Meeting since taking office.
Attendees agreed to strengthen cooperation so that policies can be operated harmoniously by communicating frequently on macroeconomic, fiscal, and financial pending issues going forward.
(Photo provided by the Ministry of Economy and Finance, Yonhap News)
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