▲ Deputy Prime Minister and Minister of Economy and Finance Lee Hyoung-il
Deputy Prime Minister and Minister of Economy and Finance Lee Hyoung-il stated, "Unless new external events occur to exert a major impact during the remaining period, (South Korea's economic growth rate for this year) could reach the mid-3% range."
He elaborated that the specific range for the mid-3% is around "3.4%, 3.5%, and 3.6%."
DPM Lee made the remarks during a press conference with an accompanying press corps held at the Queen Sirikit National Convention Center (QSNCC) in Bangkok, Thailand, where he was visiting to attend the G20 and G7 Finance Ministers and Central Bank Governors meetings and the International Monetary Fund (IMF) and World Bank (WB) Annual Meetings on the 16th (local time).
In July, the government projected South Korea's economic growth rate for this year at 3.0%.
Since then, as a steep growth trend has been confirmed, driven by a semiconductor boom, organizations such as the Organisation for Economic Co-operation and Development (OECD) and the IMF have successively raised their economic growth forecasts for South Korea.
DPM Lee forecasted, "Exports and facility investment are showing very strong performance in the third quarter as well," adding, "After climbing steeply with 1.8% in the first quarter and 0.6% in the second quarter (growth compared to the previous quarter), if conditions remain decent through the third quarter, the growth rate will turn out much better than expected."
He also announced a plan to increase the frequency of the government's economic growth rate projections from twice a year—at the end of the year and around late June to early July—to three times, noting that recent economic conditions are changing faster than before, with the growth forecast being revised upward by at least 0.4 percentage points in just three months.
DPM Lee mentioned, "At the end of the year, we naturally need to look at next year's economy, and updating additional forecasts twice a year rather than once would be a way to respond to a rapidly changing economy."
He added, "It will be difficult to see the second-half economic growth strategy (which used to be announced along with the economic forecasts for June and July) next year," and said, "Instead, we will come up with additional measures for areas that need supplementation whenever we release projections."
▲ Export and import cargo piled up at the Sinseondae Pier of Busan Port on August 6. (File Photo)
DPM Lee diagnosed that the recent economy is not only improving in terms of the growth rate, but its fundamental economic strength, the potential growth rate, is also getting better.
In fact, the IMF recently estimated South Korea's potential growth rate to rise from 1.94% last year to 2.14% this year and 2.20% next year.
He diagnosed, "Facility investment is currently very strong (in our country as well), and I expect this trend to continue next year," adding, "Semiconductors still face high demand while supply falls short."
He went on to emphasize, "Looking at the recent growth trend and growth composition, I think the potential growth rate can break away from the continuous downward trend and rebound," and "That time is approaching, and in a way, I think it is imminent."
Regarding the three mega projects currently being pursued to foster new growth engines, he said, "They are divided into the southwestern, Chungcheong, and Yeongnam regions. The Ministry of Trade, Industry and Energy is overseeing and organizing the southwestern and Chungcheong regions, while the Ministry of Economy and Finance is organizing the Yeongnam region."
He emphasized, "We plan to change the Yeongnam region Mega Project Task Force (TF) to be chaired by the Deputy Prime Minister and continue to oversee it."
DPM Lee shared that during these meetings, many countries, credit rating agencies, and officials from major multilateral development banks (MDBs) highly evaluated South Korea's growth momentum.
He also expressed his intention to devote more policy efforts to addressing polarization issues for sustainable growth.
In particular, DPM Lee said, "Jobs are an issue that connects various (polarization) problems," and "We will make greater efforts for employment."
However, he added, "Related ministries are putting their heads together and discussing the matter," and "It is difficult to pinpoint when the measures will come out."
Regarding President Lee Jae-myung's remark that available financial resources, including excess tax revenue, should be actively utilized to address polarization, he stated, "We have not yet discussed financial resources," and "I think it started from the idea of looking for more things we can do since we have expanded fiscal capacity."
(Photo provided by the Ministry of Economy and Finance, Yonhap News)
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