Choo Kyung-ho Launches Public Pension Reform: "Establishing Fiscal Vision 2050 by First Half of Next Year"

Emergency Economic Ministers' Meeting Held
"Structural Risk Factors Such as Low Birthrate and Aging Population Hinder Effective Fiscal Management"

[Asia Economy Sejong=Reporter Kwon Haeyoung] On the 28th, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho announced plans to establish the "Fiscal Vision 2050," which includes pushing forward public pension reform by the first half of next year.

On the same day, Deputy Prime Minister Choo held an emergency economic ministers' meeting at the Government Seoul Office and stated, "Structural fiscal risk factors such as low birthrate and aging population, as well as fiscal pathologies like fiscal omnipotence and selfishness, are hindering effective fiscal management."

He explained, "Major institutions such as the Korea Development Institute (KDI) and the Organisation for Economic Co-operation and Development (OECD) forecast the national debt ratio to reach 144.8% and 150.1% respectively by 2060, indicating a bleak medium- to long-term fiscal outlook. The government is establishing Fiscal Vision 2050 to anticipate and respond to these risk factors a generation ahead, focusing on enhancing the performance of fiscal investments and strategies to overcome fiscal risks."

The Fiscal Vision is a whole-of-government fiscal strategy aimed at securing the medium- to long-term sustainability of Korea's finances. It includes ▲creating growth engines centered on private enterprises and markets and establishing a virtuous cycle structure between growth and welfare ▲public pension reform and efficiency improvements in health insurance and long-term care insurance expenditures ▲establishing a fiscal support system to respond to future risks such as climate change, frequent disasters, and economic security risks ▲and building a fiscal management system that meets global standards.

As national debt surges, the government is accelerating the shift toward a sound fiscal stance. In the short term, it plans to prepare next year’s budget through a restructuring of expenditures amounting to 24 trillion won, and in the medium term, it is pushing for the legislation of fiscal rules to manage the structural fiscal balance at the mid-2% deficit level and the national debt ratio within the mid-50% range by 2026.

Deputy Prime Minister Choo emphasized, "Since the effects of the Fiscal Vision will appear 20 to 30 years from now, we must start immediately for our old age and our children's future. By the first half of next year, we will thoroughly discuss with relevant ministries and experts from various fields to establish a Fiscal Vision that can gain public consensus and continuously supplement and develop it."

Meanwhile, the government also announced measures to stabilize the supply of kimchi-making ingredients as part of efforts to stabilize living costs. Deputy Prime Minister Choo said, "As the kimchi-making season begins in November, price volatility centered on kimchi ingredients may expand. We will thoroughly manage the supply and prices of all kimchi ingredients to ensure that kimchi prices remain lower than last year."

Regarding future inflation prospects, he noted, "In October, prices are expected to be lower than initially feared due to continued declines in petroleum prices," but added, "Inflation is expected to remain at a higher level than in the past for a considerable period, and there are latent domestic and external risk factors."

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