Jin Seungho KIC President: "The Biggest Risk Is Inflation... Dollar Strength Will Continue"

[Asia Economy New York=Special Correspondent Seulgina Jo] “The biggest downside risk to the global economy this year is inflation. It will depend on how inflation is controlled.”

Jin Seung-ho, CEO of Korea Investment Corporation (KIC), said this on the 27th (local time) during a meeting with correspondents at KIC’s New York office in Manhattan, New York City. He stated, “The volatility in the global financial markets has been very high recently.” He added, “The cash portion in the portfolio has increased compared to last year,” and mentioned, “The first half of the year will be difficult, but I expect the market to improve somewhat in the second half.”

Jin CEO identified inflation in major countries as the biggest risk. He pointed out that inflationary pressures stem from both demand and supply sides, noting, “From COVID-19 to China’s policies and the Russia-Ukraine war, the supply-side inflation factors are particularly complex, so there is no suitable measure that can resolve them all at once,” expressing concerns about prolonged inflation.

Regarding the possibility of the global economy falling into ‘stagflation,’ which means economic stagnation amid high inflation, he said, “It will largely depend on how the Federal Reserve (Fed) acts going forward.” Expressing some regret over the Fed’s preemptive measures, Jin said, “If they raise interest rates by 0.50 percentage points and balance appropriately depending on the situation, it will not reach stagflation,” and assessed, “The U.S. economy itself is currently strong.” He also added about concerns over the interest rate inversion between Korea and the U.S., “Since preemptive rate hikes were made, it won’t be too tight.”

Jin CEO expects the dollar to remain strong for the time being. He mentioned various factors such as China’s recent tightening of COVID-19 lockdown measures, the prolonged Ukraine war, and the U.S. interest rate hikes, evaluating that “due to these multiple variables, the dollar’s strength will continue for a considerable period.” Regarding a question about cryptocurrency investment, he replied, “Sovereign wealth funds need to manage risks, so it is difficult to invest in highly volatile areas,” but added, “It doesn’t seem like a phenomenon that will just disappear. We are studying it before making any investment decisions.”

KIC, a sovereign wealth fund, manages and invests overseas a portion of foreign currency held by the Ministry of Economy and Finance and the Bank of Korea. Following his visit to New York, Jin plans to attend the Milken Conference held next month in Los Angeles (LA). During his stay in the U.S., he will meet not only major institutional investors but also prominent figures known as ‘big players on Wall Street’ such as Bill Ackman, Emmanuel Roman, Chairman of PIMCO, and Cathy Wood, CEO of ARK Investment, who is famous in Korea as the ‘Money Tree Sister.’

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