President Moon: "190 Trillion Won Invested in Korean New Deal" to Prevent Real Estate Concentration

Presiding over the 1st Korea New Deal Strategy Meeting
"Liquidity Shifts from Real Estate to Productive Sectors"

President Moon Jae-in is saluting the national flag at the 1st Korean New Deal Strategy Meeting held at the Blue House on the morning of the 3rd.

President Moon Jae-in presided over the '1st Korean New Deal Strategy Meeting' at the Blue House on the morning of the 3rd and stated, "The Korean New Deal will open the future of South Korea's economy through New Deal funds and New Deal finance."

At the meeting, plans for creating New Deal funds of three types (policy-type New Deal fund, infrastructure fund, private New Deal fund) to promote the Korean New Deal, as well as funding supply plans from policy financial institutions and the private financial sector for the Korean New Deal, were discussed.

Due to financial easing and fiscal expansion caused by the COVID-19 pandemic, excess liquidity has been flowing mainly into asset markets such as real estate without finding proper investment destinations. The strategy is to diversify liquidity to support housing price stabilization and to attract investment into future advanced industries, thereby broadening and deepening the flow of funds.

The government and financial sector announced funding supply plans to support the Korean New Deal.

First, the government announced the establishment of a 20 trillion won 'policy-type New Deal fund' and plans to actively discover and invest in Korean New Deal projects and companies.

The public sector will invest 7 trillion won over five years (2021?2025) to create a mother fund, which will be used as seed money to match private funds.

In this regard, policy financial institutions such as the Korea Development Bank, Industrial Bank of Korea, Export-Import Bank of Korea, and Korea Credit Guarantee Fund announced plans to supply about 100 trillion won through special loans and guarantees to strengthen the competitiveness of New Deal companies.

The five major financial holding companies?Shinhan, KB, NongHyup, Hana, and Woori?set a goal to supply about 70 trillion won over the next five years through loans and investments in digital and green New Deal-related projects and companies.

President Moon Jae-in is receiving a non-face-to-face video report on financial sector participation measures at the 1st Korean New Deal Strategy Meeting held at the Blue House on the morning of the 3rd.

Additionally, participating institutions announced specific implementation plans related to financial support for the Korean New Deal.

Korea Growth Investment Corporation revealed detailed operation plans for the upcoming policy-type New Deal fund. It aims to induce active private participation through subordinated financial support from fiscal funds and supply sufficient funds for domestic small and medium-sized enterprises in the New Deal sector to grow.

Korea Exchange disclosed plans to develop the 'K-New Deal Index (September)' and the 'Carbon Efficiency Green New Deal Index (October),' composed of stocks related to Korean New Deal industries. Once ETFs (Exchange-Traded Funds) linked to these indices are created, the general public is expected to be able to diversify investments in various New Deal companies with small amounts of investment.

Samsung Active Asset Management plans to launch the first private 'Samsung New Deal Korea Fund' in early September and announced it will focus investments on a select few companies expected to achieve sustainable growth in the green and digital sectors.

NH Financial Group also announced plans to launch the 'Green Korea' fund, a public offering fund product aimed at creating a nationwide New Deal participation boom, following the success of the 'Pilsung Korea' fund investing in materials, parts, and equipment companies (with 40,000 subscribers and a 53% investment return).

In his opening remarks at the meeting, President Moon said, "We aim to lead the success of the Korean New Deal with the three pillars of finance: fiscal, policy finance, and private finance," adding, "The Korean New Deal will see the largest investment ever made in a single project through public participation-type New Deal funds, policy finance, and private finance."

President Moon emphasized, "Over the next five years, 100 trillion won from policy finance and 70 trillion won from private finance will be invested in Korean New Deal projects and companies," and added, "This also has great significance in shifting abundant liquidity in the market from unproductive sectors such as real estate to productive sectors."

President Moon stated, "The government will swiftly promote institutional improvements and regulatory innovations necessary to accelerate the Korean New Deal," and said, "In particular, regulations that restrict New Deal projects or corporate activities will be boldly abolished."

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