Economy - The Korea Times

BOK expected to lower policy rate to 1.75% by year-end: Fitch

The Bank of Korea (BOK) is expected to lower its policy rate to 1.75 percent — a 100 basis point decline from the current 2.75 percent — by the end of this year, Fitch Ratings said Friday. "With inflation well under control. I believe the potential economic slowdown should be given greater weight, especially when weighed against concerns over rising household debt," Jeremy Zook, lead Korea sovereign analyst at Fitch Ratings, said Friday at a press meeting in Seoul. "High global policy uncertainty around trade may also dampen domestic demand through the investment channel, as firms may push back investment plans waiting for greater clarity on global trade prospects," he added. "Still, domestic consumption should gradually recover as the BOK continues to cut rates in our forecasts." Last week, Fitch lowered its 2025 growth forecast for Korea to 1.0 percent, a 0.3 percentage point decline from its March projection. The revision reflected the sharp escalation in the U.S. tariff rates, and aligns with downward growth adjustments in most major economies, the agency explained. "Fitch assume

Apr 25, 2025By Lee Yeon-woo

BOK expected to lower policy rate to 1.75% by year-end: Fitch

Financial watchdog cites lack of evidence against ex-first lady in Sambu unfair trading case

Former President Yoon Suk Yeol’s wife, Kim Keon Hee, was excluded from referral to the prosecution over alleged stock manipulation involving Sambu Construction, as “no grounds for indictment have been found,” the head of the country’s financial watchdog said Thursday. Lee Bok-hyun, governor of the Financial Supervisory Service (FSS), noted that the case has now been handed over to “a third party” — the prosecution — to verify the appropriateness and fairness of his agency’s judgment, dismissing suspicions that his personal acquaintance with Kim played a role in the decision. "We have handed over all financial tracking data related to individuals suspected of involvement in the alleged stock manipulation of Sambu Construction to the prosecution," Lee said during a media briefing in Seoul. "At the level of the financial authorities, no evidence has been found so far to confirm unfair trading by the individuals in question that would warrant a formal complaint." "The individuals in question" referred to by the governor are understood to include Won Hee-ryong, former land

Apr 24, 2025By Jun Ji-hye

Financial watchdog cites lack of evidence against ex-first lady in Sambu unfair trading case

Korea's growth could drop 0.5%p despite successful deal over US tariff: Citi

Even if tariff negotiations between Korea and the U.S. end successfully, Korea may still face a decline of 0.5 percentage points in its economic growth rate if tension between the U.S. and China continues, according to an analysis Citi released Wednesday. Kim Jin-Wook, Citi's Korea chief economist, analyzed the economic impact under three scenarios. The first and second scenarios assume the U.S. imposes reciprocal tariffs of 10 percent and 25 percent on Korea, respectively, while maintaining over 100 percent tariffs with China. In both scenarios, Korea would see a 0.5 percentage point decline in gross domestic product growth this year. However, the first scenario would lead to a drop of 2.2 percentage points in 2026 and the second 2.3 percentage points. The third scenario envisions a relatively moderate conflict in which the U.S. imposes a 10 percent tariff on Korean goods and a 60 percent unilateral tariff on Chinese imports. Yet even under this more tempered outlook, Korea's economic growth is expected to fall by 0.2 percentage points this year and by 0.9 percentage points in 2026. The a

Apr 23, 2025By Lee Yeon-woo

Korea's growth could drop 0.5%p despite successful deal over US tariff: Citi

Korea expected to gain MSCI developed market status as short selling resumes

Korea now has a very high chance of achieving developed market status from global index provider Morgan Stanley Capital International (MSCI) amid improvements to the domestic capital market, such as the March 31 resumption of short selling, Financial Services Commission Vice Chairman Kim So-young said Monday. Kim noted that the government had received feedback from MSCI regarding areas needing improvement and has since made efforts to address them. These efforts included enhancements to the short selling system, its resumption and improved accessibility for foreign investors. “There were multiple shortcomings pointed out, but more than 90 percent of them have been resolved,” he said during a press conference in Seoul. “We are now at the stage of monitoring whether investors are actually experiencing the improvements and whether those changes are being implemented smoothly.” He added, “Overall, even if it may not happen in the very next review, Korea has a very high chance of being included in the MSCI Developed Markets Indexes in the near future.” The country’s ban on stock

Apr 21, 2025By Jun Ji-hye

Korea expected to gain MSCI developed market status as short selling resumes

Customs agency to crack down on country-of-origin fraud in US exports

Korea will carry out a sweeping crackdown on foreign goods that are deceptively labeled as Korean-made before export to the United States in a bid to lessen the tariff burden imposed by the U.S. government, the Korea Customs Service (KCS) said Monday. The customs agency said the crackdown will center on goods from countries where the U.S. levies higher rates of import duties than Korea, such as China, in light of U.S. President Donald Trump’s widening tariff war. The KCS has so far seized 28.5 billion won ($20 million) worth of goods this year that were shipped from overseas and disguised as being manufactured in Korea before attempts to export them to the U.S. That amount already surpasses the total amount of goods confiscated throughout all of 2024 due to fraudulent origin labeling. Last year, the total value was 21.7 billion won. “It can seriously damage Korean exporters’ credibility in the U.S. and even result in toughened regulations against our products if foreign goods are falsely labeled as ‘Made in Korea’ to bypass the U.S. tariff policy for illicit gains,” KCS Commi

Apr 21, 2025By Yi Whan-woo

Customs agency to crack down on country-of-origin fraud in US exports

KRX boosts investor protection with active market alert system

Korea Exchange’s Market Oversight Commission said Sunday that its market alert system appears to have contributed to investor protection and the prevention of unfair trading last year. In its disclosure of the analysis of the system’s operation in 2024, the commission said the number of investment warning alerts, which indicate high investment risk, decreased by 44 percent — from 18 cases to 10 cases — due to prolonged weakness in the domestic stock market. In contrast, the number of investment caution alerts rose slightly by 5 percent — from 2,359 cases to 2,473 cases — resulting in a 4 percent total increase in alerts from the previous year. In the case of investment caution alerts, a significant portion was attributed to trading concentrated in a small number of accounts, which saw the largest year-on-year increase — rising 72 percent from 402 cases to 691 cases — likely due to a rise in management disputes and share buybacks. The commission explained that, similar to 2023, which was marked by a volatile market driven by theme stocks such as artificial intelligence and

Apr 20, 2025By Jun Ji-hye

KRX boosts investor protection with active market alert system

Top financial officials' overseas trips spark concern ahead of June presidential election

Financial Services Commission (FSC) Chairman Kim Byoung-hwan and Financial Supervisory Service (FSS) Gov. Lee Bok-hyun are facing growing controversy over their planned overseas trips as the country grapples with political and economic uncertainty ahead of an early presidential election on June 3, industry officials said Thursday. While some view the trips as a responsible move to address growing global risks, others argue the timing is inappropriate given the pressing domestic challenges. According to the FSC, the country’s top financial regulator, Kim is set to visit the United States for a seven-day trip starting Sunday to help Korean startups and venture companies secure funding abroad. During his trip, he will hold a meeting with bio venture capital professionals in Boston to assess the local venture investment ecosystem and its operations. He will also meet with senior officials from Blackstone and Morgan Stanley Capital International to discuss the Korean government’s initiatives to improve foreign exchange market accessibility, including the resumption of short selling and th

Apr 18, 2025By Jun Ji-hye

Top financial officials' overseas trips spark concern ahead of June presidential election

Stats agency considers using AI to increase household survey credibility

Statistics Korea is considering adopting artificial intelligence (AI) to enhance the credibility of government data for households that are increasingly unwilling to do in-person surveys in the digital era, officials said Thursday. They said the stats agency recently outsourced a feasibility study to the private sector to determine whether AI-driven surveys are more effective than in-person surveys in identifying household incomes, spending and consumption patterns. "The study is anticipated to last throughout 2025, and AI-driven surveys may start in 2026 if such method is deemed practical," a Public Procurement Service (PPS) official said. The PPS oversees the government's purchase of goods and services from the private sector. If AI is adopted, it will be used to collect, compile and analyze records of financial activities, such as receipts and bookkeeping journals, submitted through digital devices by a sample group of households. A Statistics Korea official said that the need for AI gained ground as the sample group has not sufficiently provided the relevant financial records over th

Apr 17, 2025By Yi Whan-woo

Stats agency considers using AI to increase household survey credibility

Finance minister says defense payments not under review for tariff talks with US

Finance Minister Choi Sang-mok on Tuesday said the cost for stationing the U.S. Forces Korea (USFK) is not currently among the agenda issues being reviewed for tariff talks with the United States. "Talks on defense payments are not being reviewed at the moment," Choi told a parliamentary interpellation session, when asked whether discussions are under way to adjust South Korea's share of the cost for the upkeep of the 28,500-strong USFK. When asked whether the issue could be included in the Trump administration's proposed "package deal" on tariffs and security issues, Choi said while he is aware of public interest in the issue, it is not among the agenda items the South Korean government is currently preparing to handle. The finance minister, meanwhile, said a liquefied natural gas (LNG) project in Alaska could serve as a potential bargaining chip in the bilateral trade talks. U.S. President Donald Trump recently highlighted the interest of South Korea and other countries in partnering with the U.S. to build a pipeline from the North Slope, a region with massive proven reserves of natura

Apr 15, 2025By Yonhap

Finance minister says defense payments not under review for tariff talks with US

Korea to expand investment in chip industry to secure global competitiveness

The Korean government on Tuesday announced plans to increase investments in the semiconductor sector to help secure the industry's global competitiveness amid heightened uncertainty following the inauguration of the new U.S. administration. "With the domestic foundation in system semiconductors being weak and increased uncertainties after the new U.S. government's launch, there is a growing call within the industry for expanded government support," the finance ministry said in a press release. The government's support measures will include expanding the budget for investments in the semiconductor sector from the current 26 trillion won to 33 trillion won ($23.2 billion) to build a "private-led" semiconductor innovation ecosystem, the ministry said. The increased investment will first be allocated to building essential infrastructure, including funding for private companies building underground transmission lines at semiconductor clusters in Yongin and Pyeongtaek, located about 40 kilometers and 65 kilometers south of Seoul, respectively. Samsung Electronics, the world's largest memory ch