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Lee Kyung-min

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Economy

Gov't debt-to-GDP ratio to up to 92% by 2060

Ministry of Economy and Finance Fiscal Policy Director General Na Ju-bum speaks during a press briefing at the Sejong Government Complex, Wednesday. Courtesy of Ministry of Economy and FinanceNPS to record a net loss as early as 2041By Lee Kyung-min The government debt-to-GDP ratio could more than double in the next four decades due to slower-than-feared growth brought on by a rapid decrease in the working population, the finance ministry said Wednesday.Tighter control of government discretionary spending is required, given mandatory spending is certain to climb amid expanded social and welfare programs following explosive demand from the growing numbers of the elderly in the population.The sustainability of eight state-run social and welfare funds will be brought into question, unless reformed via increasing premiums, reducing payouts and improving returns on fund management among other ways to bolster efficiency.The ministry said the National Pension Service (NPS), Korea's state-run pension fund and the third-largest in the world with 698 trillion won ($588 billion) in assets under

Sep 2, 2020By Lee Kyung-min
Gov't debt-to-GDP ratio to up to 92% by 2060
Economy

Record-high budget for 2021 raises fiscal soundness concern

Deputy Prime Minister and Finance Minster Hong Nam-ki, right, speaks during a press briefing at the Sejong Government Complex, Aug. 27. Yonhap'Debt increase inevitable to bolster containment, consumption'By Lee Kyung-min The government has drafted a record-high budget of 555.8 trillion won ($470 billion) for 2021, Tuesday, as part of an expansionary fiscal plan to overcome the COVID-19 pandemic and bolster the Korean New Deal, a key growth initiative defined by digitization, job creation and strengthening the social safety net.The 8.5 percent year-on-year increase from 512.3 trillion won in 2020 raises fiscal soundness concerns due to 89.7 trillion won in expected debt issuance, up almost 30 trillion won from 60 trillion won in 2020. This is inevitable given the spending total of 555.8 trillion won is expected to far surpass 483 trillion won in revenue total. Also worrisome is a steep increase of the debt-to-GDP ratio to 46.7 percent ― up from 43.5 percent in 2020 ― as well as the fiscal balance, excluding four social funds, set to record a deficit of 109.7 trillion won, accounting f

Sep 1, 2020By Lee Kyung-min
Record-high budget for 2021 raises fiscal soundness concern
Economy

Lockdown-level social distancing takes heavy toll on economy

Streets in Namdaemun market, Seoul, are nearly empty, Monday, amid Level 2.5 social distancing effective in Seoul, Incheon and Gyeonggi Province from Aug. 30 through Sept. 6. YonhapRetail sales, investment sinking amid virus resurgence By Lee Kyung-min “The Aug. 15 rally nearly destroyed my business,” said a man surnamed Kim, an owner of a traditional Korean eatery in Jongno, downtown Seoul.He said the recently heightened COVID-19 warning level has nearly hammered his once-booming business backed by many regulars, most of whom were office workers from nearby Gwanghwamun.The guidelines on social distancing were raised to the second-highest “Level 2,” Aug. 19, days after many firms reinstituted a work-from-home policy driven by a surge in new infections from participants in the Aug. 15 Liberation Day rally in Gwanghwamun.The distancing rule further raised to level 2.5 is effective from Aug. 30 through Sept. 6., with additional advisories recommending that residents in Seoul, Incheon and the surrounding Gyeonggi Province stay home and all gatherings be cancelled.

Aug 31, 2020By Lee Kyung-min
Lockdown-level social distancing takes heavy toll on economy
  • Korea's COVID-19 cases set to surpass 20,000
  • S. Korea reports 248 new virus cases
  • Two more service members test positive for new coronavirus
Economy

Level 3 social distancing will necessitate 2nd disaster relief: finance minister

Deputy Prime Minister and Finance Minister Hong Nam-ki speaks during a meeting at the Seoul Government Complex in Gwanghwamun, Thursday. YonhapRaising the level strongest headwind to recovery By Lee Kyung-min Deputy Prime Minister and Finance Minister Hong Nam-ki said the government will consider initiating a second round of cash-equivalent relief campaign, should social distancing measures be raised to Level 3 from the current 2 amid a rapid flare-up of COVID-19 infections. The first round of relief incurred 14 billion won (11.8 million) in government funds after providing up to 1 million won to all households. The highest level, defined by a ban on gatherings of 10 or more people and other tightened rules, will deal a severe blow to the country's economy, posing the strongest headwind to the economy, he added.“Raising the level to 3 should follow the deepest consideration of its far-reaching consequences on every sector of society,” Hong said during a press briefing Thursday.The change in the social distancing level together with changes in the number of new infections

Aug 28, 2020By Lee Kyung-min
Level 3 social distancing will necessitate 2nd disaster relief: finance minister
Economy

Beijing Hyundai Auto Finance fined for violating credit data management laws

Hyundai Capital CEO Chung Tae-young Korea Times fileBy Lee Kyung-min Beijing Hyundai Auto Finance, Hyundai Capital's corporate body in China, was fined for violating credit data management laws there amid declining profits in China, industry sources said Friday.The People's Bank of China fined the car finance firm 150,000 yuan ($21,800), Aug. 19, for violating laws governing the collection, provision, storage and verification of credit information.Hyundai Auto Finance was jointly established by Hyundai Motor, its financing subsidiary Hyundai Capital and Beijing Automotive Industry Holding (BAIC).The scrutiny from the Chinese central bank came after the company was fined 300,000 yuan for failing to abide by relevant rules in disclosing fees for services in November 2018.The repeated punishment may burden Hyundai Motor's growth plan in China. Beijing Hyundai, Hyundai Motor's corporate body in China, reported net losses of 540 billion won ($455 million) in the January-June period this year, already surpassing last year's annual losses of 523.4 billion won. It recorded over 2.72 trillion

Aug 28, 2020By Lee Kyung-min
Beijing Hyundai Auto Finance fined for violating credit data management laws
Economy

Netflix, Delivery Hero under audit for alleged tax evasion

National Tax Service (NTS) Assistant Commissioner for Investigation Lim Kwang-hyun gives a press briefing at the NTS in Sejong, Thursday. YonhapBy Lee Kyung-min The National Tax Service (NTS) launched an audit into Netflix Services Korea and Delivery Hero Korea, as part of a broad investigation into suspected tax evasion committed by multinational firms operating here, according to industry and government sources, Thursday. They are two of up to 21 high-profile multinational companies under investigation. Officials from the tax authority searched the offices of Delivery Hero Korea in Seocho-gu, southern Seoul, and Netflix Services Korea in downtown Seoul, Wednesday.Delivery Hero Korea is an emerging contactless business whose noticeable jump in annual sales has been backed by the continued spread of COVID-19. Netflix Services Korea is another of the top beneficiaries from the pandemic. They allegedly paid tens of billions of won ― tens of millions of U.S. dollars ― in consulting fees to their parent firms for years despite no clear evidence to suggest such “expensive” ser

Aug 27, 2020By Lee Kyung-min
Netflix, Delivery Hero under audit for alleged tax evasion
Economy

Bank of Korea cuts 2020 growth outlook to -1.3%

Bank of Korea (BOK) Governor Lee Ju-yeol bangs a gavel during a policy rate-setting meeting at the bank in Seoul, Thursday. YonhapKey interest rate remains untouched at 0.5%By Lee Kyung-minThe Bank of Korea (BOK) forecast Thursday that the economy will contract 1.3 percent in 2020 due to the fallout of the prolonged COVID-19 pandemic. The outlook, which would be the worst performance since 1998 in the aftermath of the Asian financial crisis, was sharply revised down from the 0.2 percent contraction projected in May. In its regular rate setting meeting, the central bank kept the key rate unchanged at 0.5 percent.“The downgrade was due to a resurgence of coronavirus cases here and the worldwide pandemic showing no signs of decline,” BOK Governor Lee Ju-yeol said during an online press conference from the BOK's headquarters in Seoul.“Accordingly, exports and domestic consumption are likely to recover slower than expected,” he added. “Worse-than-expected exports for the second quarter and heavy rainfall were also factored in.”Against this backdrop, Lee

Aug 27, 2020By Lee Kyung-min
Bank of Korea cuts 2020 growth outlook to -1.3%
Economy

Gov't to maintain expansionary fiscal policy next year

Deputy Prime Minister and Finance Minister Hong Nam-ki, right, speaks during a policy coordination meeting between the ruling Democratic Party of Korea and the finance ministry at the National Assembly on Yeouido in Seoul, Wednesday. Yonhap'Containment effort the top priority, Level 3 social distancing must be avoided'By Lee Kyung-min The ruling Democratic Party of Korea (DPK) and the government agreed, Wednesday, to maintain an expansionary fiscal policy in 2021, as a precautionary move to ward off a longer-than-feared economic downturn brought on by the continued spread of COVID-19. Deputy Prime Minister and Finance Minister Hong Nam-ki said policy priority will be placed first and foremost on containment efforts, among many other measures to combat the pandemic, adding fiscal discretion will function as the “last bastion of support.”The government is unlikely to offer an emergency relief package similar to the previous one, whereby up to 1 million won ($840) was offered to all Korean households. The government is instead discussing limiting the recipients to those earn

Aug 26, 2020By Lee Kyung-min
Gov't to maintain expansionary fiscal policy next year
Economy

Opposition party to remove tax incentives for foreign real estate investors

gettyimagesbankBy Lee Kyung-min Foreign nationals may no longer be able to enjoy up to a 30 percent reduction in capital gains tax when selling their homes after retaining them for over three years, as a main opposition lawmaker said Tuesday he is seeking to remove the incentive long granted to long-term property investors from overseas.The move by Rep. An Byung-gil of the United Future Party (UFP) is the latest in a series of anti-real estate speculation measures pushed jointly by both ruling and opposition parties as well as the government amid the steady rise of apartment prices in Seoul following ― and despite ― two dozen botched real estate policies over the past three years.Also included in the bill is removing the deductible of up to 10 percent on gains made by the owner of a government-built apartment when selling it after renting it out for at least six years.“The continued housing market overheating is illustrated in part by foreign nationals buying a record-high number of homes, many of which are used as a method of making short-term, windfall gains at the expense of

Aug 25, 2020By Lee Kyung-min
Opposition party to remove tax incentives for foreign real estate investors
Economy

BOK to sharply lower economic growth outlook

Bank of Korea Governor Lee Ju-yeol speaks during the National Assembly Economy and Finance Committee in Yeouido, Seoul, Monday. YonhapHong against 2nd round of cash relief to allBy Lee Kyung-min Bank of Korea Governor Lee Ju-yeol said Monday that he cannot rule out the possibility of the economy contracting by more than 1 percent in 2020, due to the longer-than-feared continuation of COVID-19 infections.This is far lower than the 0.2 percent projection made in May, based on the slow-but-steady decline of confirmed cases after a peak in the second quarter. “The previous forecast will have to be significantly lowered,” Lee said at the National Assembly Economy and Finance Committee in Yeouido. “Consumption will be considerably affected as new COVID-19 infections are recently showing signs of spreading, leading to stricter social distancing. We will need to take a closer look at the datasets.”The gloomier-than-feared assessment follows a rapid jump in the daily number of new confirmed cases nationwide over the past week ― ranging between 197 (Aug. 16) at its lowe

Aug 24, 2020By Lee Kyung-min
BOK to sharply lower economic growth outlook
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