Lee Chang-yong and Choi Sang-mok "Need to Boost Potential Growth Rate to Revitalize Economy"

Choi Sang-mok, Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance (right), and Lee Chang-yong, Governor of the Bank of Korea, shake hands on the 6th at the expanded macroeconomic policy meeting held at the Bank of Korea headquarters in Jung-gu, Seoul. 2024.2.6 Photo by Joint Press Corps [Image source=Yonhap News]

Lee Chang-yong, Governor of the Bank of Korea, and Choi Sang-mok, Deputy Prime Minister and Minister of Economy and Finance, met and emphasized the need to raise South Korea's potential growth rate to revitalize the economy.

On the 6th, Governor Lee and Deputy Prime Minister Choi hosted an expanded macroeconomic policy consultation meeting at the Bank of Korea headquarters in Jung-gu, Seoul, under the theme "Policy Directions for Solving Structural Problems of Our Economy and Realizing a Dynamic Economy."

Governor Lee stated, "Structural problems in our society include a decrease in labor supply due to low birth rates and aging, and a lack of global leading companies that create high added value," adding, "Changes in the trade environment such as protectionism, the disappearance of the China special demand, concentration in the Seoul metropolitan area, and population outflow from local areas must also be addressed."

He continued, "To raise the potential growth rate, it is necessary to improve the utilization of idle labor, maintain competitiveness in ICT (Information and Communication Technology) manufacturing, promote convergence between industries, proactively respond to external risks such as supply chain diversification, and alleviate concentration in the Seoul metropolitan area through the development of key cities."

Deputy Prime Minister Choi diagnosed, "Excessive regulations and weakening of the corporate growth ladder have significantly reduced the dynamism across industries and companies, while the population crisis, including a decline in the working-age population, has become a reality, causing the potential growth rate to continuously decline."

He added, "We must explore policy tasks to restore the dynamism of our economy, such as strengthening the innovation ecosystem, ensuring fair opportunities, enhancing social mobility, and overcoming demographic crises like low birth rates," emphasizing, "It is urgent to implement an economic and social system that simultaneously achieves growth, distribution, and economic sustainability."

Meanwhile, the macroeconomic policy consultation meeting, established in 2011, was previously attended by deputy heads, but with its elevation to the institution head level, the Deputy Prime Minister officially visited the Bank of Korea for the first time since 2018. In the second half of the year, Governor Lee plans to visit the Ministry of Economy and Finance.

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