Ministry of Finance and Economy

On November 6, Deputy Prime Minister and Minister of Finance and Economy Lee Hyoung Il convened a Market Situation Review Meeting[1] with relevant authorities at the Government Complex Seoul to review domestic and global financial market developments following the U.S. midterm elections and discuss policy responses.   Participants expressed serious concern over heightened volatility in global stock markets following the U.S. midterm elections, as U.S. stocks also fell sharply overnight, particularly technology shares, following a steep decline in Korea’s stock market the previous day. However, they agreed that the recent stock market declines reflected a combination of factors, including policy uncertainty surrounding the AI industry, such as concerns over regulations on AI data centers, and weakening global investor sentiment. They also noted that Korea’s stock market appeared to be reacting excessively to these external factors.   Participants agreed that Korea’s economic fundamentals remain stronger than ever, given projections of economic growth in the mid-3 percent range this year, exports reaching USD 1 trillion and corporate operating profits exceeding KRW 900 trillion. Against this backdrop, they emphasized the need to guard against excessive pessimism driven by heightened market anxiety.   Relevant authorities agreed to continue monitoring developments in the global semiconductor industry and policy trends in major economies. They also pledged to maintain the highest level of vigilance, closely monitor domestic and global stock markets and capital flows in real time, and respond proactively to prevent further market instability.   First, to prevent market volatility from being amplified by excessive forced selling following sharp stock price declines, the authorities decided to waive the requirement for securities firms to maintain a 140 percent collateral ratio on margin loans for three months, effective November 9. Second, the authorities agreed to closely monitor excessive market anxiety and one-sided trading flows, while preparing additional market stabilization measures should volatility increase further. Third, they agreed to continue policy efforts to fundamentally improve Korea’s capital markets, including enhancing corporate value and confidence in the capital markets. [1] Chairman of the Financial Services Commission, Governor of the Financial Supervisory Service and Deputy Governor of the Bank of Korea. Please refer to the attached files.

On November 5, Deputy Prime Minister and Minister of Finance and Economy Lee Hyoung Il met with a delegation from Fitch Ratings as part of its annual consultations to discuss recent developments in the Korean economy and key policy directions.    * Fitch Ratings delegation: Senior Director and Head of Asia-Pacific Sovereigns Thomas Rookmaaker and Director of Asia-Pacific Sovereign Ratings Sagarika Chandra.   Deputy Prime Minister Lee explained that Korea’s economy is likely to grow in the mid-3 percent range this year, as the boom in artificial intelligence (AI) and semiconductors drives exports and investment. He also said he expected Korea’s potential growth rate to reverse its downward trend and rebound. Emphasizing the importance of translating the current economic boom into sustainable growth, he outlined the government’s three key policy priorities.   First, the government is moving forward as planned with three mega-projects in semiconductors, physical AI and AI data centers to raise the country’s potential growth rate, along with seven SEED projects[1] aimed at fostering future growth engines. In particular, the government plans to actively support the spread of productivity gains from the AI and semiconductor boom to other industries and the broader domestic economy, thereby further strengthening the foundations for Korea’s economic growth.   Second, as growth disparities across industries and regions persist despite the boom in certain sectors, including semiconductors, the government is also focusing its policy efforts on reducing economic polarization and ensuring that the benefits of growth are more widely shared. The government is discussing fundamental solutions with various research institutions while pursuing three major projects in housing, employment and inclusive finance in the short term. Through these efforts, including job creation for young people and strengthening the foundations for regional growth, the government aims to ensure that the benefits of economic growth are widely shared among the Korean people and across the broader economy.   Finally, the government intends to make effective use of increased tax revenues generated by the AI and semiconductor boom to invest in future growth and strengthen fiscal soundness. In particular, it plans to invest in growth engines through initiatives such as the Future Fund, while setting aside a substantial portion of the temporary increase in tax revenue to prepare for potential external shocks. It also aims to enhance medium- to long-term fiscal sustainability, including by keeping the government debt-to-GDP ratio below 50 percent by 2030 through performance-oriented fiscal management and expenditure restructuring.   The Fitch delegation expressed strong interest in whether Korea’s recent economic momentum could be structurally sustainable beyond a temporary upswing in the semiconductor cycle. In response, Deputy Prime Minister Lee stressed that, despite structural challenges such as population decline and aging, Korea could achieve economy-wide productivity gains and raise its potential growth rate by actively fostering new growth engines through large-scale capital investment and promoting the adoption of AI across regions and small and medium-sized enterprises (SMEs).   From November 3 to 5, the Fitch delegation held its annual consultations with various institutions, including the Ministry of Finance and Economy, the Bank of Korea and the Korea Development Institute (KDI).   [1] The government initiatives aimed at fostering advanced technologies as future growth engines. They cover small modular reactors (SMRs), fusion energy, renewable energy, quantum technology, space and aviation, advanced biotechnology and advanced supply chains. Please refer to the attached files. 

On November 3, Second Vice Minister of Finance and Economy Huh Chang met with Bangladesh Finance Minister Amir Khosru Mahmud Chowdhury in Seoul. Minister Chowdhury visited Korea as a special envoy of Bangladesh Prime Minister Nahman, following the inauguration of the new Bangladeshi government in February this year, to further strengthen bilateral cooperation.   Both sides acknowledged the significant potential for cooperation between Korea, with its advanced technologies and industrial development experience, and Bangladesh, with its large consumer market and strategic position as a hub in South Asia. They shared the view that the Korea-Bangladesh Comprehensive Economic Partnership Agreement (CEPA), which was agreed upon in principle in August, would provide an opportunity to substantially expand bilateral economic cooperation.   Second Vice Minister Huh first expressed his appreciation to Minister Chowdhury for his contributions to bilateral relations during his 17 years of service as Korea’s Honorary Consul in Chattogram (Chittagong) from 1990 to 2007. He also expressed hope that Minister Chowdhury would continue to serve as a bridge for strengthening economic cooperation between the two countries. In particular, he highlighted Bangladesh’s considerable growth potential as a market with a population of 170 million, noting the rapid increase in bilateral trade, which reached approximately USD 2.4 billion in 2025 and USD 1.7 billion in the first half of 2026.   Vice Minister Huh stated that the Korea-Bangladesh CEPA would serve as an important milestone in taking bilateral economic cooperation to a new level and called for timely follow-up measures to ensure its early entry into force. Building on the CEPA, he proposed diversifying the range of goods traded between the two countries and broadening the scope of cooperation to include infrastructure, defense and high-tech industries.   In addition, he emphasized the need to foster a more business-friendly environment by improving customs clearance and visa renewal procedures and addressing regulatory issues, so that Korean companies operating in Bangladesh can conduct their business smoothly and without disruption. He called on the Bangladeshi government to pay particular attention to these matters.   In response, Minister Chowdhury described Korea as Bangladesh’s top-priority partner for economic development and industrial advancement. He expressed hope that the two countries would build a mutually beneficial partnership through broad-based economic cooperation in areas including trade, investment, finance and industry. He also emphasized his government’s commitment to actively supporting more Korean companies in doing business in Bangladesh and facilitating greater Korean investment by addressing business-related difficulties.   Both sides agreed to actively identify mutually beneficial cooperation projects through the Economic Development Cooperation Fund (EDCF), the Economic Innovation Partnership Program (EIPP) and other initiatives. These efforts will focus on future-oriented areas such as artificial intelligence (AI), digital technology, supply chains and green sectors, with the aim of meeting Bangladesh’s development needs while creating opportunities for Korean companies to participate. Please refer to the attached files.