Ministry of SMEs and Startups Holds Emergency Meeting to Address Prolonged Complex Crisis

Proactive Response to Prolonged Triple High Crisis Including US Interest Rate Hikes
Risk Diagnosis by Sector for SMEs, Ventures, and Small Business Owners

Minister Lee Young of the Ministry of SMEs and Startups is reviewing recent macroeconomic trends and sector-specific risks at the "Emergency Meeting for Proactive Response to the Triple Crisis," held on the 3rd at the Government Seoul Office in Gwanghwamun, Seoul.

[Asia Economy Reporter Kim Cheol-hyun] The Ministry of SMEs and Startups (Minister Lee Young) announced on the 3rd that it held an emergency meeting with related organizations to proactively respond to the expansion of domestic and international uncertainties, such as the continuous interest rate hikes in the United States, and signs of prolonged complex crises.

The Ministry explained that the Federal Reserve Board (FRB) of the United States raising its benchmark interest rate will lead to an increase in the domestic benchmark interest rate in the future, which could exacerbate difficulties in the recovery of small and medium-sized enterprises (SMEs) and small business owners. In particular, the loan balance of SMEs and small business owners, which increased by more than 100 trillion won compared to last year, is highly likely to lead to an excessive interest burden.

Additionally, exports, which had increased for 23 consecutive months, turned to a decline starting in October, and the trade balance has shown a deficit for seven consecutive months. Signs are emerging that the complex crisis, which began in the areas of inflation, finance, and exchange rates, is negatively affecting the real economy sector as well. The business sentiment among SMEs is also concerned about the future, as the SME business outlook for November has declined.

In response, Minister Lee Young convened an "Emergency Meeting for Responding to the Complex Crisis of SMEs and Startups" on the same day. This was to check potential risks that may appear in SMEs and startups in the future and to prepare proactively. The meeting reviewed recent macroeconomic trends and their impact on SMEs and discussed plans for operating a task force (TF) to respond to the prolonged complex crisis. Risk diagnoses and future plans were also discussed for each target group, including SMEs, startups and venture companies, and small business owners.

Minister Lee said, "At last week's Emergency Economic and Livelihood Meeting, key topics included the improvement of performance in core industries such as shipbuilding and secondary batteries, and fostering ultra-gap startups as new growth engines for SMEs and startups in the digital economy era," adding, "Nevertheless, if the economic crisis predicted by experts materializes next year, SMEs may face a situation where they have to worry about survival rather than growth."

He continued, "Through the ‘Task Force for Responding to the Prolonged Complex Crisis,’ in which the minister directly participates, we will continue discussions on risk diagnosis and customized response measures. Based on the tasks identified, next year the Ministry of SMEs and Startups plans to mobilize all its capabilities with two main pillars: digital transformation and risk response," he emphasized.

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