Economy - The Korea Times

Fiscal strain builds as expansionary policy continues

Concerns are growing over the country’s fiscal soundness as government debt topped 1,300 trillion won ($877 billion) in 2025, rising by about 130 trillion won in a single year to a record high, experts said Thursday. Further adding to the concerns, the government is maintaining an expansionary fiscal stance, with additional supplementary budgets expected to put further pressure on public finances amid the prolonged Middle East conflict. The government projects the debt could climb to nearly 1,800 trillion won by 2029. Experts warned that the most pressing concern is the pace of increase, underscoring the need for a balanced approach that maintains fiscal discipline while directing spending to priority areas. According to the government’s 2025 fiscal year settlement report, which was approved Monday, government debt stood at 1,304.5 trillion won, up 129.4 trillion won from a year earlier. The figure exceeded the original budget estimate of 1,301.9 trillion won by 2.6 trillion won, marking an all-time high. The debt-to-GDP ratio rose to 49 percent from 46 percent a year earlier and is

Apr 10, 2026By Jun Ji-hye

Fiscal strain builds as expansionary policy continues

Gov't to exempt owners of multiple homes from heavier tax if they sell by May 9

The government will exempt owners of multiple homes from higher capital gains taxes should they file for sales permits by May 9, the finance ministry said Thursday. The move follows President Lee Jae Myung's directive earlier this week to introduce supplementary measures giving people owning multiple homes extra time to sell properties before the exemption ends, with the law imposing higher taxes set to take effect May 9. The ministry said the grace period for owners of multiple homes in designated speculative areas will end as scheduled May 9, but those who apply for land transaction permits by the same day will be excluded from the heavier tax. Accordingly, sales transactions of properties in Seoul's long-designated speculative zones — Gangnam, Seocho, Songpa and Yongsan districts — need to be completed by Sept. 9, the ministry added. For those in the remaining 21 other districts of Seoul that were newly designated as speculative zones in October, owners have up to six months, or until Nov. 9, to complete transactions. The maximum tax rate will reach 75 percent for capital gains on

Apr 9, 2026By Yonhap

Gov't to exempt owners of multiple homes from heavier tax if they sell by May 9

Regulators tighten crypto exchanges' withdrawal rules to curb scams

Financial regulators said Wednesday they will close loopholes in how cryptocurrency exchanges handle withdrawal delays by introducing a unified set of exemption rules across the industry. The measure is aimed at preventing criminals, such as voice phishing and scammers, from quickly cashing out stolen funds. In many cases, illicit money is first deposited into an account, converted into cryptocurrency and then withdrawn before it can be traced or frozen. Since May 2025, authorities have required exchanges to delay crypto withdrawals for 24 to 72 hours after a deposit. The idea is to create a buffer period that gives financial institutions time to detect and block suspicious transactions. There are exemptions to the rule, based on factors such as how long an account has been active, its transaction history, trading volume and any record of financial misconduct. However, until now, each exchange applied its own criteria. That inconsistency created loopholes. In some cases, accounts could qualify for exemptions relatively easily, allowing scammers to bypass the delay and withdraw funds almo

Apr 8, 2026By Park Han-sol

Regulators tighten crypto exchanges' withdrawal rules to curb scams

Gov't to regularly check prices of automotive lubricant, marine fuel to stabilize supplies

The government will conduct weekly checkups on automotive lubricant and marine fuel markets to rein in rising prices and stabilize supplies of such products, the industry ministry said Wednesday. The Ministry of Trade, Industry and Resources unveiled the plan at a meeting with officials from related ministries and the fuel industry, held to discuss a response to increasing prices of automotive lubricant, such as engine oil, and marine fuel products and their supply disruptions. The ministry said it has been leading an intergovernmental inspection team to look into why the country is facing shortages in automotive lubricant supplies despite stable production of the product. Korea's lubricant production stood at 760,000 barrels last month, marking a slight increase from the corresponding figure of 710,000 barrels in March last year, according to data compiled by the Korea Petroleum Association. The government will work to boost the transparency of domestic petroleum product supply chains and respond to any act disrupting market order, such as artificial supply control and excessive price h

Apr 8, 2026By Yonhap

Gov't to regularly check prices of automotive lubricant, marine fuel to stabilize supplies

7th consecutive rate hold looms as Middle East risks weigh on economy

The Bank of Korea (BOK) is widely expected to keep its interest rate unchanged at 2.5 percent at Friday's monetary policy board meeting, market watchers said Tuesday, as rising Middle East tensions add to inflation and foreign exchange risks. The central bank has held the benchmark interest rate steady for six consecutive meetings, and analysts view the current economic backdrop as leaving little room for a policy shift. With inflation and foreign exchange volatility rising amid increasingly prolonged conflict in Iran, the BOK faces a policy dilemma. A rate cut could fuel inflationary pressures, while a hike risks deepening the economic slowdown and clashing with the government’s expansionary fiscal policy, including a planned 26.2 trillion won ($17.3 billion) supplementary budget. Joo Won, a senior researcher at the Hyundai Research Institute, said the six members of the monetary policy board are likely to unanimously hold rates at Friday's meeting. "With liquidity expected to be injected through the supplementary budget, a rate cut could further fuel inflationary pressures," Joo said

Apr 7, 2026By Lee Hyo-jin

7th consecutive rate hold looms as Middle East risks weigh on economy

Gov't to provide additional liquidity, ease refinancing burden for crisis-hit firms

Finance authorities will expand policy financing programs and ease bond refinancing burdens for companies affected by the prolonged crisis in the Middle East, the financial regulator said Tuesday. Financial Services Commission (FSC) Chairman Lee Eog-weon made the remarks during a meeting with officials from the petrochemical and refining industries, which are particularly vulnerable to global supply disruptions and rising costs stemming from the conflict involving Iran. The government expanded the size of emergency funding programs from 20.3 trillion won ($13.47 billion) to 24.3 trillion won late last month and plans to increase it further to 26.8 trillion won through a supplementary budget, according to the FSC. Private financial institutions, including five major financial holding groups, are also expected to supply more than 53 trillion won in new financing programs. Starting Tuesday, small and midsized firms affected by the Middle East crisis will be allowed to lower repayment ratios and reduce interest premiums when refinancing primary collateralized bond obligations (P-CBOs) within

Apr 7, 2026By Yonhap

Gov't to provide additional liquidity, ease refinancing burden for crisis-hit firms

Impact of US metal tariff adjustments to differ for export items: ministry

Korean industries will see mixed impact from the United States' adjustment of metal tariffs as the effect will be different for each export item, the industry ministry said Monday. The Ministry of Trade, Industry and Resources made the assessment as the adjusted U.S. tariffs on steel, aluminum and copper imports based on their "full customs value" took effect earlier in the day. Under the new scheme, the U.S. administration will impose 50 percent duties on imported products made entirely or almost entirely of steel, aluminum or copper based on their full value. Derivatives substantially made of such materials are subject to 25 percent tariffs, while products made of 15 percent or less steel, aluminum or copper are exempt from the sectoral tariff. With the simplification of the U.S. tariff system, the ministry said Korean companies will likely face fewer burdens in calculating specific U.S. duties for their products, with the impact of the adjusted tariffs expected to be different by item. For instance, key export items, including ultra-high voltage transformers and certain machine tools,

Apr 6, 2026By Yonhap

Impact of US metal tariff adjustments to differ for export items: ministry

Crypto exchanges to face tighter asset-matching system following Bithumb's blunder

All crypto exchanges in Korea are asked to set up a system to check and verify their internal ledgers with actual crypto holdings every five minutes, the financial regulator said Monday. According to the Financial Services Commission (FSC), three out of five major crypto exchanges here have been reconciling their asset matching every 24 hours, with the remaining two balancing their internal ledgers with actual holdings between every five minutes and ten minutes. Also, their trade-halting systems, also known as kill switches, were found to have some flaws in cases where a massive asset mismatch occurs, according to the FSC. The regulator said all crypto exchanges are asked to set up the asset-matching system by the end of May and disclose their asset-matching balance every day, which also requires external checks by accounting firms every month. Related regulations will be drawn up into a bill aimed at regulating the overall virtual asset market. The government and the ruling Democratic Party have been working to fine-tune the bill. The FSC's step came as Bithumb, one of Korea's crypto exc

Apr 6, 2026By Yonhap

Crypto exchanges to face tighter asset-matching system following Bithumb's blunder

Korea to exempt shipping surcharges from tariffs amid Hormuz disruptions

Korea will temporarily exempt additional shipping costs from tariffs on Middle East imports rerouted due to disruptions in the Strait of Hormuz, the government said Friday, as concerns mount over raw material shortages. The government will also fast-track customs clearance for key energy and raw materials to ease supply bottlenecks. The measures are part of a broader deregulatory package announced by the Ministry of Economy and Finance, in coordination with other agencies such as the industry ministry and Korea Customs Service, aimed at stabilizing supply chains without additional fiscal spending. "The government will exclude additional shipping costs caused by detours around the Strait of Hormuz from import duty calculations, easing the burden on importers," First Vice Finance Minister Lee Hyoung-il said during a briefing. Officials said the changes will be reflected in a planned revision to the enforcement decree of the Customs Act next week, and will be applied retroactively to shipments already affected by sharp increases in freight costs. The decision comes as freight rates have surg

Apr 3, 2026By Lee Hyo-jin

Korea to exempt shipping surcharges from tariffs amid Hormuz disruptions

Lee urges public transportation control measures

President Lee Jae Myung has called on the government to prepare traffic control measures during commuting hours as part of energy-saving steps amid the war in the Middle East, a senior official said Thursday. A senior presidential official told reporters that Lee instructed the transportation ministry to take the lead on such measures, including potential adjustments to free public transportation use for seniors aged 65 and older during peak hours. The government plans to tighten a five-day vehicle rationing system in the public sector to a two-day rotation next week, while encouraging voluntary participation from the private sector and promoting the use of public transportation. Lee has previously proposed limiting free transit access for seniors during peak hours if measures such as a license plate-based vehicle rotation system are expanded, in order to reduce congestion on public transportation. The instruction came after reports of confusion over whether the transport, welfare or environment ministry should oversee the issue. The government raised its resource security crisis warning

Apr 2, 2026By Yonhap

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