ASEAN+3 Deputy Finance Ministers Meeting... "Maintain Active Macroeconomic Policies, Discuss Timing for Normalizing Expansionary Policies"

[Asia Economy Sejong=Reporter Son Seonhee] Amid the financial vice ministers' meeting involving 13 countries including Korea, China, Japan, and the Association of Southeast Asian Nations (ASEAN), the Korean government proposed maintaining active macroeconomic policies for a full economic recovery while discussing the appropriate timing and pace of normalizing expansionary policies.

According to the Ministry of Economy and Finance on the 2nd, Park Il-young, Director General for International Economic Affairs at the Ministry, who attended as the Korean government's chief representative at the 'Korea-China-Japan Financial Vice Ministers and Central Bank Deputy Governors Meeting' and the 'ASEAN+3 (Korea-China-Japan) Financial Vice Ministers and Central Bank Deputy Governors Meeting' held via video conference the previous day, made these remarks.

Director Park also urged, "Since the global supply chain operation paradigm has shifted from 'efficiency' to 'stability' after the pandemic, discussions on stabilizing supply chains within ASEAN+3 as a global production base are necessary." He added, "Given the need to respond swiftly to structural changes such as the accelerated transition to a digital and carbon-neutral economy due to the pandemic, discussions on future tasks for ASEAN+3 are timely," and expressed hope that "meaningful outcomes will be achieved through active communication and discussions among member countries."

The regional macroeconomic research organization (AMRO), which attended the meeting, forecasted that "due to the spread of Omicron, increased inflationary pressures from the Russia-Ukraine war, global supply chain disruptions, and reduced trade, the ASEAN+3 growth rate this year will be somewhat lower than last year." It particularly pointed out downside risks such as the pandemic's progression including variant virus spread, prolonged Russia-Ukraine war, continued global supply chain disruptions, and faster-than-expected normalization of U.S. monetary policy.

It also recommended, "Policies for recovery from the pandemic should not be withdrawn prematurely, and balanced policy management is necessary, especially by expanding support for new growth sectors such as the transition to a digital economy."

Member countries attending generally agreed with the economic research organization's outlook and actively concurred on the need to strengthen regional financial cooperation and policy coordination to respond to downside risks such as geopolitical risks and inflationary pressures.

The Chiang Mai Initiative, a multilateral currency swap for regional liquidity support, will this year allow donor countries holding third-country currencies to provide support in the requested currencies. They also discussed the necessity and methods for adjusting the additional interest rates borne by applicant countries when requesting funds.

Regarding future tasks, four working groups were formed in the second half of last year. The 'Fintech' working group led by Korea plans to present common guidelines through research and analysis of the regional fintech regulatory status within this year and subsequently support pilot projects for interested countries.

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