Yoon: "The Fiscal Soundness Policy Must Be Maintained During Next Year's Budget Deliberations"

Responding to Global Economic Crisis Based on Fiscal Soundness
Mentions Completion of Foreign Exchange Swap and Securities Market Stabilization Fund Procedures Between Foreign Exchange Authorities and National Pension Service
Improving Current Account Through Export Expansion, Service Industry Competitiveness Enhancement, and Energy Saving Efficiency
President Yoon Urges Ministers "Not to Let Their Guard Down"

[Image source=Yonhap News]

[Asia Economy Reporter Ki-min Lee] On the 7th, President Yoon Suk-yeol urged economic-related ministers to "maintain the fiscal soundness policy stance during the upcoming budget review process for next year."

The intention is to respond to the global economic crisis by securing external credibility and stabilizing the foreign exchange market based on a consistent fiscal soundness policy.

At the 10th Emergency Economic and Livelihood Meeting presided over by President Yoon at the Yongsan Presidential Office that morning, he said, "Uncertainty in the domestic and international economy, as well as the financial and foreign exchange markets, is increasing. At times like this, we must remain vigilant and respond calmly."

First, in his opening remarks, President Yoon cited the recent case of the United Kingdom to explain the importance of the government's stable and consistent policies. When Liz Truss, the new UK Prime Minister, recently announced the 'Growth Plan 2022' which included a large-scale tax cut, the market worried about the deterioration of the UK's fiscal soundness, leading to a crash in the pound and government bond prices.

Regarding this, President Yoon mentioned, "It clearly shows how important it is for the government to have stable and consistent policies during a crisis to maintain external creditworthiness," and "In such situations, securing fiscal soundness is also very important."

He continued, "Recently, international credit rating agencies have positively evaluated our government's stance on securing fiscal soundness, maintaining or upgrading South Korea's sovereign credit rating," emphasizing, "It is very important to unwaveringly maintain a sound fiscal stance from the perspective of external credibility."

In particular, based on the fiscal soundness policy stance and recent external credibility, he also ordered the establishment of a safety net for the foreign exchange and capital markets. President Yoon said, "To improve the supply and demand environment of the foreign exchange market, we will proactively expand safety nets, including foreign exchange swaps between foreign exchange authorities and the National Pension Service, in addition to already announced measures," and emphasized, "Regarding the capital market, we will complete procedures for operating the Securities Market Stabilization Fund in October and ensure that necessary market safety measures are promptly implemented depending on the situation."

He also expressed, "To activate foreign investment in stocks and bonds, we will remove outdated systems and regulations and promote the inflow of overseas funds into the domestic capital market."

Regarding the current account, the basic safety net of external soundness, he explained, "Although a significant current account surplus is expected for the year, we will proactively prepare to sustain this surplus trend," adding, "Along with efforts to expand exports and strengthen the competitiveness of the service industry, we will promote import reduction through energy saving and efficiency, and prepare detailed measures to improve the current account across all sectors including tourism and logistics."

President Yoon urged the attending ministers, saying, "Our government must not let down its guard until the people feel reassured," and requested, "Ministers should also make greater efforts to actively communicate with the private sector and the market."

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