Economy - The Korea Times

Lee Jae-myung urged to revitalize faltering economy

Few would disagree that Korea's economy is in deep trouble. From a sharp decline in consumer spending to soaring household debt, domestic economic indicators paint a grim future. Externally, escalating global trade tensions, fueled by U.S. tariffs, pose a serious threat for the export-reliant economy. Against this backdrop, Lee Jae-myung of the Democratic Party of Korea (DPK) won the presidency in Tuesday's election with 49.42 percent of the vote. His campaign centered on one promise: to prioritize economic recovery and tackle livelihood issues head-on. On the eve of the election, he reiterated this commitment. "We will swiftly prepare a supplementary budget so that money can begin circulating through parched local economies and bring some relief to the struggling livelihoods of ordinary people." His pledge comes at a critical moment. Korea is now staring down sub-1 percent growth this year — a level of stagnation witnessed only during major crises like the Asian financial crisis in 1997, the global financial market meltdown in 2008 and the COVID-19 pandemic in 2020. The supplementary b

Jun 4, 2025By Lee Yeon-woo

Lee Jae-myung urged to revitalize faltering economy

Gov't to offer $21.2 mil. for R&D projects in future mobility sector

The Seoul government will provide more than 30 billion won ($21.2 million) for research and development (R&D) projects aimed at developing core technologies in the future mobility sector, the industry ministry said Wednesday. The government will offer up to 34.1 billion won in support funds to some 30 R&D projects on developing eco-friendly and autonomous driving vehicle technologies, according to the Ministry of Trade, Industry and Energy. The projects will also include developing electronic and battery control devices for hydrogen and electric vehicles and high-performance chips for software-defined vehicles, as well as artificial intelligence (AI) models for self-driving cars. The ministry said it will work to boost the competitiveness of the Korean automotive industry amid trade uncertainties sparked by U.S. tariff measures and the global economic slowdown.

Jun 4, 2025By Yonhap

Gov't to offer $21.2 mil. for R&D projects in future mobility sector

Korea to take cautious approach toward US tariff talks

Korea is expected to slow the progress of tariff talks with the United States following the election of Lee Jae-myung from the liberal Democratic Party of Korea (DPK) as president in Tuesday’s snap election. Lee defeated Kim Moon-soo of the conservative People Power Party, winning 49.42 percent of the vote to Kim’s 41.15 percent. Lee has repeatedly expressed his intent to delay the signing of the "July Package," scheduled for July 8 — the date when the delay of the U.S. "reciprocal" tariffs ends — objecting to the plan devised by negotiators appointed by impeached former President Yoon Suk Yeol. "We do not need to reach an agreement earlier than other countries," Lee said during a televised debate on May 18, when asked about his approach to trade negotiations with the U.S., widely seen as a priority task for the export-reliant country's next administration. Lee's appointment of former Trade Minister Kim Hyun-chong as his adviser on diplomatic affairs also signals a hawkish stance. Kim resisted U.S. demands during the 2017 renegotiation of the Korea-U.S. Free Trade Agreement. Speak

Jun 4, 2025By Park Jae-hyuk

Korea to take cautious approach toward US tariff talks

Next gov't faces daunting task in curbing household debt

The new administration should not let unwarranted optimism for falling benchmark interest rate and growing investor interest in homes and stocks further increase household debt, economists and market analysts said Monday. The warning comes as outstanding household loans extended by five major commercial banks — KB Kookmin, Shinhan, Hana, Woori and NH NonghHyup — totaled 747.29 trillion won ($542.18 billion) as of Thursday. The amount marked the fourth month of consecutive increases in household debt, which has long been regarded as the “time bomb” for the Korean economy. This is because the ratio of such debt to gross domestic product (GDP) has been notably higher compared to other major economies. According to the most recent update from the Bank of International Settlements (BIS), the ratio for Korea stood at 91 percent in the second quarter of 2024. In comparison, the ratio averaged at 68.9 percent for advanced countries. The growing household debt was partly attributable to the Bank of Korea’s (BOK) monetary easing cycle, with the base rate falling to 2.5 percent on Thursday,

Jun 2, 2025By Yi Whan-woo

Next gov't faces daunting task in curbing household debt

Pet insurance market hopeful over next government's veterinary care policy

The pet insurance market is hopeful that the new government will help reverse the slower-than-expected growth in subscription rate despite a sharp increase in the number of Koreans living with companion animals. Lee Jae-myung, the presidential frontrunner from the liberal Democratic Party of Korea (DPK), and Kim Moon-soo, Lee’s opponent from the conservative People Power Party (PPP), all have pledged to standardize the costs of veterinary care. The costs vary greatly and thus place a significant financial burden on an estimated 15 million Koreans who own pets. A government-led cost policy is expected to improve transparency around premiums, coverage and other cost-related issues in pet insurance, as well as boost the number of subscribers, according to industry officials. They noted that a lack of consistency was a major reason why only a small percentage of pet owners opt for veterinary insurance. Since companion animals are not covered by national health insurance, owners must bear 100 percent of the medical costs. While private pet insurance is an option, uptake remains low, and veter

May 30, 2025By Yi Whan-woo

Pet insurance market hopeful over next government's veterinary care policy

Banks brace for ‘co-prosperity’ burden under new administration

Commercial banks are preparing for the challenge of allocating substantial funds to support financially unstable customers in the name of co-prosperity under the new government, industry officials said Thursday. The lenders have been under pressure for years, both from the government and politicians, to share their profits with society. Such pressure is linked to negative public sentiment that banks’ profits — much of which comes from interest income — are seen as easy money, in contrast to the hard-earned incomes of financially distressed households, small business owners and other groups. A new president will begin his term immediately after the snap presidential election, Tuesday. Whichever candidate wins the presidency, banks will need to make sustained efforts toward co-prosperity, as all major contenders have pledged to ease the burden on indebted customers. The candidates, however, did not specify how they would fund the massive cash required to lower lending rates, offer special, low-interest loans and even write off debts, among a broader range of supportive measures. Bank o

May 29, 2025By Yi Whan-woo

Banks brace for ‘co-prosperity’ burden under new administration

Financial watchdog vows stronger oversight, reforms to restore trust in Korea’s capital market

The Financial Supervisory Service (FSS) will strengthen oversight of controlling shareholders, enhance crackdowns on unfair trading practices and improve the market environment for foreign investors in an effort to accelerate structural reforms aimed at restoring trust in Korea’s capital markets, it said Wednesday. The financial watchdog also plans to institutionalize the intensive review system for rights offerings and regular audits of proxy voting practices while expanding the electronic monitoring of short selling and on-site inspections of private equity funds to improve both market transparency and investor protection. Hahm Yong-il, senior deputy governor of the FSS, emphasized during a media briefing that consistency and predictability are key, signaling that his agency will pursue long-term reforms rather than one-off measures. The media briefing was widely viewed as an opportunity to highlight the achievements of FSS Gov. Lee Bok-hyun, who will complete his term on June 5, and to express the organization’s commitment to maintaining its current policy direction and continuin

May 28, 2025By Jun Ji-hye

Financial watchdog vows stronger oversight, reforms to restore trust in Korea’s capital market

Procurement office pushes to make inroads into Central Asia

The Public Procurement Service (PPS) is pushing to enhance its presence in Central Asia and pave the way for Korean private companies to explore business opportunities in the regional public sector. The PPS said Monday a delegation led by Vice Administrator Baek Seung-bo last week visited Kazakhstan, Tajikistan and Kyrgyzstan, where Korea-made goods and software were provided as samples to the government as well as public organizations in each country. The participating entities from the three Central Asian countries worked in public health, medical care, road transport, logistics, urban governance and others. The PPS accordingly procured in advance Korean companies' goods and software that may interest these entities. “This overseas showcase of the Korea-made products was to let overseas public institutions get to know about their quality and performance by trying them for free,” the PPS said. The PPS noted that a range of government-led industries are growing rapidly in Central Asia, and therefore, “strategic support is crucial for Korean companies to expand in the regional procur

May 26, 2025By Yi Whan-woo

Procurement office pushes to make inroads into Central Asia

PPP candidate vows to appoint secretary to address corporate challenges

Conservative People Power Party (PPP) presidential candidate Kim Moon-soo promised Thursday to create a senior presidential secretary position overseeing business challenges during a meeting with the heads of Korea’s top business associations and lobby groups. During the meeting held at the Korea Chamber of Commerce and Industry (KCCI) in Seoul, Kim also stressed that the government’s role is to support businesses’ economic activities. “The most important and biggest promise in my campaign is that I will make a country favorable for businesses,” Kim said. “The president’s job is to ensure that companies can freely conduct research, make investments, expand globally and create jobs.” The meeting focused on delivering policy recommendations from the business community to the presidential candidate and listening to his economic policy ideas. The participants included KCCI Chairman Chey Tae-won, Korea Enterprises Federation Chairman Sohn Kyung-shik, Federation of Korean Industries Chairman Ryu Jin, Korea International Trade Association Chairman Yoon Jin-sik and Federation of

May 22, 2025By Nam Hyun-woo

PPP candidate vows to appoint secretary to address corporate challenges

Lee Jae-myung outlines vision for 'basic society'

Lee Jae-myung, the presidential candidate of the Democratic Party of Korea (DPK), outlined his policy vision for a "basic society," Thursday, pledging to move Korea toward a system in which the state guarantees a basic standard of living for all people. "A basic society is not limited to fragmented welfare or income redistribution," Lee wrote on Facebook. "It seeks to lay the foundation for sustainable growth by providing real, comprehensive guarantees in housing, health care, caregiving, education and public services." Basic income — the provision of regular, unconditional payments to all individuals — has long been one of Lee’s signature policies. While his latest pledge did not reference the concept directly, the DPK explained that the idea has since been broadened and integrated into a more comprehensive framework. Providing context, Lee criticized the limitations of Korea’s current welfare system, which, he said, is based on the outdated assumption that everyone is consistently able to work. "As we enter an era of low growth, inequalities in opportunities and resources are d

May 22, 2025By Lee Yeon-woo

Policy