Finance minister nominee sees 3% growth, $40,000 per capita income

Lee Hyoung-il, nominee for deputy prime minister and minister of finance and economy, presented an optimistic economic outlook, Tuesday, forecasting that Korea could achieve 3 percent growth this year and cross the $40,000 threshold in per capita national income, fueled by a thriving semiconductor sector amid the ongoing artificial intelligence surge.

During his confirmation hearing at the National Assembly, Lee, currently the first vice finance minister, said the semiconductor boom is propelling key economic indicators such as exports and investment.

“With domestic consumption and employment expected to follow suit after a brief lag, achieving 3 percent economic growth this year is becoming increasingly tangible, setting the stage for per capita income to advance into the $40,000 range,” he said.

Lee vowed to closely monitor potential risk factors, including semiconductor market fluctuations, global interest rate shifts and capital movements, to ensure macroeconomic stability and mitigate market volatility.

On the recent monetary tightening by the Bank of Korea, including consecutive benchmark interest rate hikes, Lee expressed support for the policy direction.

“I support the strategy of monetary tightening and rate adjustments,” Lee said. “Given the substantial inflow of liquidity through current account surpluses generated by the semiconductor boom, proactive and sound management is necessary.”

At the same time, he acknowledged that tighter liquidity resulting from higher interest rates could place a burden on economically vulnerable households and businesses.

“To address these challenges, targeted fiscal support measures can be deployed to assist vulnerable borrowers, effectively complementing monetary policy,” Lee explained, adding that such targeted initiatives have been incorporated into next year’s budget proposal.

Turning to foreign investment, Lee highlighted that ongoing discussions with Washington regarding Korea’s U.S.-bound investments are being conducted within the established caps of $20 billion annually and $200 billion overall.

The comments came amid concerns that total investments might exceed the initial terms during the course of the bilateral negotiations.

While declining to elaborate on specific projects, Lee reiterated, “We will ensure that all discussions remain firmly within the parameters defined by the memorandum of understanding.”

He added that comprehensive details would be formally presented to the National Assembly in accordance with statutory procedures once discussions conclude.

“The $350 billion in U.S.-related investments encompasses $200 billion in direct U.S. investments alongside $150 billion designated for bilateral maritime and shipbuilding cooperation,” he said. “Korea will approach these discussions with a focus on maximizing national economic interests while reinforcing the core bilateral alliance.”