IMF Managing Director: "South Korea's Potential Growth Rate Gradually Slowing... Need to Consider Introducing Foreign Workers and Enhancing Productivity"

IMF Managing Director Press Conference at Seoul Lotte Hotel

Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), stated, "To offset the decline in growth rates, we need to consider measures such as introducing foreign workers to increase labor market participation and economic activity rates, as well as enhancing productivity."

At a press conference held on the 15th at the Lotte Hotel in Seoul, Georgieva said, "South Korea's potential growth rate is gradually slowing down because the population is not what it used to be, and its industrial competitiveness has reached the frontier, making growth more difficult than in the past."

She added, "We need to think about how to bring in foreign labor outside of Korea. Although there may be cultural resistance, it is necessary to introduce foreign dynamism. Also, when investing in research and development (R&D), it would be beneficial to focus on investments suited to a society increasingly dependent on new climate, economy, and digital sectors, and to make more efforts related to the green economy."

Georgieva emphasized the need to increase female labor force participation. She explained, "Globally, balancing work and childcare to increase economic activity participation and enable people to work longer is an important issue for mature economies. Investments in various areas that make it easier for women to work, as well as childcare-related protection facilities and parental leave, will also help improve the labor market and work-life balance."

She issued a warning against premature monetary easing policies. "Some countries declare victory too early, but this can lead to price stabilization and rigidity, resulting in more difficult situations," she said. "Paradoxically, efforts are crucial until the very end to control inflation," she emphasized.

Regarding the global economy, she evaluated it as "showing remarkable resilience" but pointed out that the recovery is uneven. Georgieva said, "The global economy has shown remarkable recovery in recent quarters, and inflation is decreasing. The IMF forecasts global economic growth of about 3% for both this year and next year. However, polarization is deepening worldwide, and core inflation remains at a high level, so I believe central banks still have unfinished roles to play."

She viewed the Chinese economy as a variable for the overall Asian economy. Georgieva diagnosed, "Looking at China's growth in the third quarter, it showed better-than-expected results, which is good news for export-oriented countries like South Korea. When China grows by 1%, Asia as a whole experiences 0.3% economic growth, but conversely, if China's economic growth slows, it could negatively impact the entire Asian region."

Regarding the digital currency (CBDC), the agenda of this international conference, she said, "The emergence of new types of digital currencies offers many important opportunities but can also pose potential risks. I highly welcome South Korea's pilot asset experiments related to CBDC and its efforts to upgrade regulations on crypto assets. I believe South Korea serves as a good example for other countries."

Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF). (File photo)

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