Lee Chang-yong, BOK Governor: "If Oil Prices Exceed Mid-80 Dollars, Next Year's Growth Forecast Will Be Revised"

Bank of Korea Governor Lee Chang-yong is speaking at the Monetary Policy Direction press conference held at the Bank of Korea in Jung-gu, Seoul on August 24. [Image source=Yonhap News]

Lee Chang-yong, Governor of the Bank of Korea, stated that if international oil prices exceed the mid-$80 range, the growth forecast for next year will be revised.

Governor Lee made these remarks during an interview with Bloomberg TV on the 12th (local time) in Marrakech, Morocco, where the G20 Finance Ministers and Central Bank Governors meeting was held.

He explained, "We predicted a 2.2% growth next year assuming that international oil prices would remain around the mid-$80 range. However, if oil prices rise beyond that, we will need to revise our growth forecast."

Earlier, the Bank of Korea projected South Korea's economic growth rate for next year at 2.2% in its revised economic outlook released in August. This forecast was based on the assumption that the annual international oil price would remain at $83 per barrel for Brent crude next year.

However, due to the recent war between Israel and the Palestinian militant group Hamas, the Middle East situation has become unstable, leading to analyses that international oil prices may rise further.

Regarding the oil price outlook, Governor Lee said, "I was somewhat surprised by the market reaction over the past few days. Although movements in oil prices and exchange rates have been relatively quiet, I believe this is just the beginning of what will happen. It is too early to make a judgment now."

He also mentioned that the real estate market has achieved a soft landing and that he is not worried about credit tightening.

In response to a question about credit tightening, he said, "I think you are referring to the situation at the end of last year. There was a credit event that triggered a decline in real estate prices, and we achieved the policy goal of a soft landing in real estate prices at that time."

However, Governor Lee pointed out, "With the success of the real estate soft landing, people have started to expect real estate price increases. Now, the focus is on maintaining financial stability and reducing household debt ratios."

Governor Lee also commented on the economic impact of K-POP.

He evaluated, "K-POP is not just music; it is creating new businesses," adding, "Many K-POP companies are selling photos of K-POP girl groups and non-fungible tokens (NFTs)."

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