[Weekly Outlook] Economic and Financial Chiefs Discuss 'Legoland' Incident Today... Focus on Q3 GDP Growth Rate

Deputy Prime Minister Chu Holds Emergency Macroeconomic and Financial Meeting

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Kwon Haeyoung] Amid a flood of domestic and international adverse factors in the financial market such as the US interest rate hike and the Legoland default crisis, the heads of economic and financial authorities will hold an emergency meeting on the 23rd. The Bank of Korea will announce the preliminary statistics for the third quarter real Gross Domestic Product (GDP) on the 27th.

According to the Ministry of Economy and Finance on the day, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho, Bank of Korea Governor Lee Chang-yong, Financial Services Commission Chairman Kim Joo-hyun, Presidential Office Economic Secretary Choi Sang-mok, and Financial Supervisory Service Governor Lee Bok-hyun will hold an emergency macroeconomic and financial meeting at the Seoul Banking Hall.

At the meeting, they will discuss the recent inspection results of the corporate bond market, commercial paper (CP), and other short-term funding markets, as well as measures to stabilize the market. The purpose is interpreted as diagnosing the market situation and preparing countermeasures as the bond and other funding markets have tightened due to the rapid interest rate hikes combined with the Legoland crisis.

The Bank of Korea will announce the preliminary statistics for the third quarter real GDP on the 27th. Previously, the second quarter GDP growth rate (provisional) recorded a higher-than-expected 0.7% due to increased private consumption following the lifting of social distancing measures. However, exports declined by more than 3% due to the global economic slowdown. In the third quarter, it is highly likely that the export slowdown widened due to the prolonged Ukraine crisis and the global economic slowdown caused by interest rate hikes in major countries. The Bank of Korea forecasts South Korea's GDP growth rate for this year at 2.6%, explaining that it can be achieved if the economy grows by 0.1 to 0.2% (quarter-on-quarter) in both the third and fourth quarters.

President Yoon Suk-yeol will hold the 11th Emergency Economic and Livelihood Meeting on the 27th, focusing on economic risk responses. Along with Deputy Prime Minister Choo and other related ministers, he is expected to engage in a 90-minute in-depth discussion on "economic risk response and measures to secure new growth and export engines." It is anticipated that each economic ministry will present their situation assessments and response plans during the discussion.

The National Assembly's Planning and Finance Committee will conduct a comprehensive audit of institutions such as the Ministry of Economy and Finance, the Bank of Korea, and the Export-Import Bank on the 24th. Issues such as macroeconomics including inflation, interest rates, and exchange rates, tax reforms including corporate tax and comprehensive real estate tax, and next year's budget plan are expected to be questioned. The Financial Services Commission and the Financial Supervisory Service will also undergo a comprehensive audit by the National Assembly's Political Affairs Committee on the 24th.

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