Economy - The Korea Times

Regulator to further tighten curbs on household debts from July

All local lenders in Korea will be forced to sharply reduce their household lending, while home-backed loans for home purchases in the capital area will be capped at 600 million won ($442,000), the financial regulator said Friday, in an unprecedentedly aggressive move to rein in rising household debts. Starting next week, all local banks, insurers and other lending institutions will be asked to reduce their target level of aggregate household loans to 50 percent of their earlier targets, according to the Financial Services Commission (FSC). The target for policy loans extended to low-income earners and newlyweds will be cut by 25 percent. Every year, banks are advised to set their loan extensions at certain levels to curb a sharp rise in household debts. With the coming measures, banks and other financial institutions are expected to sharply reduce loans to households. The FSC said all financial institutions will also be required to manage their loan extensions. Currently, only banks are subject to government oversight over household debt management. Also, mortgage loans extended to buy ho

Jun 27, 2025By Yonhap

Regulator to further tighten curbs on household debts from July

Vice finance minister stresses equitable distribution of benefits from extra budget

Second Vice Finance Minister Lim Ki-keun emphasized Thursday the importance of ensuring that the benefits of recently announced cash handouts are delivered to all citizens without exception. Earlier this month, the government proposed a second extra budget worth 20.2 trillion won ($14.7 billion) to stimulate consumption and support the economy. The proposal includes distributing "consumption coupons" ranging from 150,000 won to 500,000 won per person, depending on income levels. "For this supplementary budget to serve as a priming pump to restore a virtuous cycle in our economy, it is crucial that the benefits from the consumption support program are distributed thoroughly to all citizens," Lim said during a meeting with small business owners. The latest budget proposal comes after a 13.8 trillion-won extra budget was passed in May. The new package is still subject to approval by the National Assembly. "Once the supplementary budget is passed, please make thorough and meticulous preparations so it can be implemented swiftly and stably," Lim added.

Jun 26, 2025By Yonhap

Vice finance minister stresses equitable distribution of benefits from extra budget

SK suspends controversial IPO of lubricant unit in line with president's shareholder-friendly policy

SK Group decided to temporarily suspend its plan to spin off SK Enmove, its lubricant-manufacturing unit, from SK Innovation and make it a publicly traded company, Wednesday, as the move is feared to clash with President Lee Jae Myung’s policy to protect retail investors. In a press release, SK Innovation said it will temporarily halt the initial public offering (IPO) process of SK Enmove "in light of recent capital market conditions and various internal circumstances." A key group affiliate in petroleum and other energy resources, SK Innovation holds a 70 percent stake in SK Enmove. The firm said it will acquire the remaining 30 percent stake owned by Ecosolution Holdings, a special company established by IMM Credit Solution for the purpose of investing in SK Enmove shares. The purchase of all corresponding 12 million shares will be made on July 2, at a per share price of 71,605 won ($52.50). “Making SK Enmove into a wholly owned subsidiary is the optimal decision to align with SK Innovation’s strategic direction and to enhance SK Enmove’s managerial efficiency,” the company st

Jun 25, 2025By Yi Whan-woo

SK suspends controversial IPO of lubricant unit in line with president's shareholder-friendly policy

Do liberal governments really drive up home prices? Experts say it's more complicated

There’s a commonly held belief in Korea: Housing prices tend to rise under liberal governments. It seems the data supports this perception. According to the Korea Real Estate Board, Seoul’s housing price index rose by 33.2 percent during the Kim Dae-jung administration, 42.9 percent under Roh Moo-hyun and 20.9 percent during Moon Jae-in's term. Following Lee Jae Myung’s election victory on June 3, the Seoul housing market is heating up once again. Household debt is climbing rapidly, with loans from the five major banks increasing by 4 trillion won ($2.9 billion) as of Friday. This marks the fastest growth in 10 months, as people rush to buy homes before prices rise even further. Data from the Bank of Korea shows that consumers' expectations for home price growth have reached their highest levels in June since the late-2021 housing boom. "People who had been patiently holding out, hoping for a price drop, are now panicking and saying they can’t wait any longer," said Kim In-man, head of Kim In-man Real Estate and Economics Institute. "The fear of missing out that peaked in 2021 is

Jun 24, 2025By Lee Yeon-woo

Do liberal governments really drive up home prices? Experts say it's more complicated

'July package' with US remains elusive as Lee-Trump meeting stalls

Uncertainty is growing over whether Korea and the United States will reach a tariff deal by July 8 — the day the pause on U.S. "reciprocal" tariffs ends — as Korea’s top negotiator remains skeptical of the plan devised by the previous administration and a meeting between the two countries’ leaders has stalled once again. Departing for Washington on Sunday, Trade Minister Yeo Han-koo told reporters the "July package" is now meaningless, citing unstable political and economic conditions in the U.S. His remarks contrasted with what the two countries agreed on during high-level talks in April. At the time, they agreed to pursue a package deal by July 8 for exemption of Korean products from U.S. "reciprocal" and item-specific tariffs. "With the launch of the new government, our position on these negotiations has become clear," Yeo said after arriving in the U.S. "We do not need to be bound by the deadline." Yeo is scheduled to stay in Washington for a week to meet senior U.S. government officials and lawmakers, as well as with think tanks and industry insiders. This marks the first vi

Jun 23, 2025By Park Jae-hyuk

'July package' with US remains elusive as Lee-Trump meeting stalls

Financial market on high alert as US strikes on Iran trigger volatility

Financial authorities and institutions in Korea have entered into emergency response mode after the United States' airstrikes on Iran's nuclear facilities have heightened market volatilities, officials said Monday. The domestic stock market had maintained strong momentum amid expectations for the launch of Korea's new government on June 4, even after Israel first attacked Iran on June 13, according to the officials. But market volatility has since increased due to growing uncertainty over Iran's potential response to the U.S. strikes. The Financial Services Commission (FSC), the country's top financial regulator, held an emergency meeting Monday to assess the state of the stock and foreign exchange markets. The meeting, presided over by FSC Chairman Kim Byoung-hwan, was attended by Financial Supervisory Service Senior Deputy Governor Hahm Yong-il and Korea Exchange CEO Jeong Eun-bo, among others. They examined global reactions to the U.S. strikes on Iran and analyzed recent trading patterns of foreign and institutional investors in the local market. They agreed to strengthen market monit

Jun 23, 2025By Jun Ji-hye

Financial market on high alert as US strikes on Iran trigger volatility

Massive debt relief plan raises concerns over moral hazard

The government's plan to forgive 16.4 trillion won ($11.9 billion) in debt for 1.13 million long-term defaulters is drawing criticism from borrowers who have faithfully repaid their loans, industry officials said Friday. "What does that say to self-employed people who paid off their debt by working late-night driving jobs or doing manual labor without sleep?" one commenter wrote in an online community for the self-employed. "It would be more appropriate to lower high interest rates or extend repayment periods instead." Another commenter argued, "People should repay the money they borrowed themselves," adding, "They want to enjoy the rights but avoid the responsibilities." Their frustration stems from the government's massive debt relief plan, announced Thursday. The plan is a response to a growing number of individuals, especially the self-employed, who have been unable to repay their debts as the economic downturn persists. The plan will target unsecured loans of up to 50 million won that have been delinquent for more than seven years. Borrowers who earn less than 60 percent of the media

Jun 20, 2025By Lee Yeon-woo

Massive debt relief plan raises concerns over moral hazard

Lee's prepaid vouchers to spur consumption, may fuel inflation: experts

The Lee Jae Myung administration's decision to distribute prepaid vouchers to all citizens is expected to serve as a catalyst for boosting consumption at a time when sluggish domestic demand has been a major drag on Korea's economic growth, experts said Friday. However, some warned that the impact may be short-lived and argued that the measure is not a fundamental solution for revitalizing the economy. Concerns were also raised over potential side effects, such as upward pressure on inflation. The government approved a 30.5 trillion won ($22 billion) supplementary budget plan during a Cabinet meeting Thursday. As part of the plan, it allocated 13.2 trillion won — including 10.3 trillion won from the central government and 2.9 trillion won from local governments — to distribute prepaid vouchers, ranging from 150,000 won to 500,000 won per person, in a bid to breathe life into the sluggish domestic market. This marks the second supplementary budget of the year and the first to be drawn up since Lee took office on June 4. Professor Kim Dae-jong of Sejong University's School of Business

Jun 20, 2025By Jun Ji-hye

Lee's prepaid vouchers to spur consumption, may fuel inflation: experts

Gov't, ruling party push for cash handout for all citizens in extra budget plan

The government and the ruling Democratic Party of Korea (DPK) said Wednesday a planned extra budget will include cash handouts for all citizens, with DPK officials indicating that the size of the budget plan may exceed 20 trillion won ($14.5 billion). Rep. Jin Sung-joon, the DPK's chief policymaker, made the announcement after a policy meeting with party and government officials, saying the budget will provide cash payments to all citizens, as well as additional assistance to low-income and vulnerable groups. "The ruling party has consistently called for universal relief, and the government has accepted our proposal," Jin told reporters. The second supplementary budget will likely exceed 20 trillion won, following this year's first extra budget of 13.8 trillion won. The relief package, designed to boost the economy and support people's livelihoods, especially among low-income groups, marks a key initiative of the Lee Jae Myung administration. Last month, the National Assembly passed a 13.8 trillion-won extra budget, which included some 400 billion won for the issuance of vouchers to help

Jun 18, 2025By Yonhap

Gov't, ruling party push for cash handout for all citizens in extra budget plan

InterviewVeteran customs officer at center of joint anti-drug operation with Thailand

Kim Jun-hyoung, a veteran customs officer, has been at the center of a special joint crackdown between Korea and Thailand on drugs since the operation began in 2022. Titled SIREN, the annual operation is crucial in Seoul’s bid to regain its status as a drug-free country, as Thailand accounts for nearly half of the drugs that are smuggled into Korea. According to the Korea Customs Service (KCS), 45.6 percent of 787 kilograms of illegal drugs that it seized in 2024 were from Thailand. “I take my job seriously in planning the overall operation, including the timing and scope of the mission, as well as selection and dispatch of the KCS agents, which all need to be carefully coordinated with the Thai customs authorities,” Kim told The Korea Times in a recent interview. The interview came shortly after the fourth annual joint operation was carried out from March 1 to May 31. An operation coordination unit is set up at the two countries’ main gateways — Incheon International Airport and Suvarnabhumi Airport — when a sweeping crackdown takes place during a certain time of the year. The

Jun 18, 2025By Yi Whan-woo

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