Hong Nam-ki "Expecting 3Q Rebound... Promoting '30 Trillion + α' Private Investment Projects" (Comprehensive)

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is delivering opening remarks at the "11th Emergency Economic Central Countermeasures Headquarters Meeting and 1st Korean New Deal Related Ministers Meeting" held on the 23rd at the Government Seoul Office in Jongno-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Kwangho Lee] Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, stated on the 23rd regarding the real Gross Domestic Product (GDP) growth rate for the second quarter of this year recording -3.3% compared to the previous quarter, "This reflects the full impact of the novel coronavirus infection (COVID-19). The reason the second quarter GDP was lower than expected is due to the external sector shock being greater than anticipated despite a rebound in domestic demand."

At the Emergency Economic Central Countermeasures Headquarters (Economic Central Headquarters) meeting and the 1st Korean New Deal Ministerial Meeting held at the Government Seoul Office on the same day, Deputy Prime Minister Hong said, "The government aimed for a +0.1% growth for this year in the second half economic policy direction (Hakyungjeong), expecting the second quarter to be in the mid-to-late -2% range, but the actual performance fell short of this."

Deputy Prime Minister Hong explained, "From the export perspective, as the global pandemic continued to spread, the impact of the severe global economic recession appeared deeper than expected. The unprecedented global economic shutdown caused not only a decrease in customs-cleared exports of general domestic products but also led to the suspension of overseas production bases in countries like Vietnam and India, intensifying export shocks through so-called 'non-customs-cleared export' routes."

However, regarding domestic demand, he mentioned, "Although service consumption has not yet fully recovered, thanks to policy effects such as emergency disaster relief funds and the reduction of individual consumption tax on passenger cars, as well as the resumption of economic activities, consumption of goods has turned positive."

Deputy Prime Minister Hong predicted, "If the effects of supplementary budgets (Chugyeong) and the Korean New Deal policies, along with the normalization of overseas production, schools, and hospital activities?which constrained growth in the second quarter?combine with base effects, an economic rebound on a track similar to China’s is possible in the third quarter."

China experienced the spread and containment of COVID-19 earlier than other countries in the first quarter, leading to a significant rebound in growth rate in the second quarter.

Deputy Prime Minister Hong emphasized, "Credit card sales in June increased sharply, and in July, the average daily exports showed signs of recovery, with exports to China continuing to rise and exports to the U.S. turning to an increase, indicating a mitigation of the slump. We will achieve an economic rebound in the third quarter through thorough quarantine measures and mobilizing all available policy tools."

The government plans to promote private investment and private capital activation projects worth 30 trillion won plus alpha (+α) to revitalize private projects such as the Korean New Deal projects.

In addition to the previously announced 10 trillion won private projects, new projects worth 7.6 trillion won will be discovered in roads and railroads. Private projects worth 12.7 trillion won, including the Green Smart School project revealed in the Korean New Deal, will also be actively pursued.

Furthermore, to realize the AI and data-based manufacturing innovation advancement strategy for small and medium enterprises, an AI small and medium venture manufacturing platform will be established by 2022. By 2025, 1,000 '5G+AI smart factories' will be distributed, and clusters will be formed through data sharing among smart factories.

Support measures such as research and development (R&D) investment, professional workforce training, and startup funding will be prepared for smart manufacturing supply companies to actively nurture supply companies equipped with technology and export competitiveness.

This content was produced with the assistance of AI translation services.