Ministry of Finance and Economy

On September 28, Deputy Prime Minister and Minister of Finance and Economy Lee Hyoung Il visited the Bank of Korea (BOK) and met with BOK Governor Shin Hyun Song. The visit took place just six days after Deputy Prime Minister Lee took office on September 22, as the heads of Korea’s economic and monetary policy authorities shared the view that closer communication and cooperation among relevant authorities were needed amid heightened financial market volatility and external uncertainties than in the past.   Deputy Prime Minister Lee and Governor Shin noted that economic indicators, including exports and investment, have remained strong, supported in part by robust semiconductor performance, contributing to strengthen growth momentum. At the same time, external uncertainties remain elevated due to factors such as rising interest rates in major economies and geopolitical risks, while pressures on people’s livelihoods persist at home. They also agreed that financial, foreign exchange (FX) and real estate markets are becoming increasingly interconnected. Against this backdrop, the two institutions should further strengthen their cooperation framework to detect risk factors early and respond preemptively, taking a comprehensive view of overall economic conditions rather than focusing solely on macroeconomic indicators.   To this end, Deputy Prime Minister Lee proposed that the two institutions ➊communicate more closely and explore ways to ensure harmonious economic and monetary policy implementation in pursuit of their shared goals of price stability, growth and financial stability; and ❷enhance their cooperation framework for integrated monitoring of financial, FX and asset markets and early policy responses. He also called on the two institutions to ❸take a longer-term perspective in jointly addressing future challenges, including the internationalization of the Korean won and digital finance, as well as exploring ways to raise Korea’s potential growth rate and ensure that the benefits of growth are more widely shared. In response, Governor Shin emphasized that overall macroeconomic stability, underpinned by price and financial stability, is essential to laying the foundation for sustainable growth amid a rapidly changing environment. He also underscored the need for close communication and cooperation between the two institutions in achieving this goal.   Following the visit, the two sides agreed to continue their communication and collaboration through various channels, including existing mechanisms such as market situation review meetings. Please refer to the attached files.

On September 18, First Vice Minister Lee Hyoung Il visited Gongneung Dokkaebi Market to review grocery prices and spending trends ahead of the Chuseok holiday and hear firsthand about the challenges facing market vendors.   To help stabilize grocery prices ahead of Chuseok, the government is providing a record KRW 193 billion in discounts from September 3 to 30 – more than double last year’s KRW 90 billion – and expanding the supply of key holiday food items to 185,000 tons, in accordance with the Measures to Stabilize Livelihoods During the Chuseok Holiday, announced on September 1, and supplementary measures announced on September 9. As of September 16, 121,000 tons of the planned 163,000 tons of agricultural and livestock products and 6,000 tons of the planned 22,000 tons of fisheries products had been supplied. The government will continue to implement the announced measures as planned, while offering additional discounts on Korean beef, pork, chicken and other products by making full use of available resources, including self-help funds. It also plans to launch large-scale discount events through the National Agricultural Cooperative Federation and other channels.   In addition, from September 16 to 20, the government is holding on-site Onnuri Gift Certificate rebate events at participating traditional markets nationwide, with 300 markets each for agricultural and livestock products and fisheries products. Shoppers purchasing domestically produced agricultural and livestock products and fisheries products can receive up to KRW 20,000 per person for each of the two categories as Onnuri Gift Certificates, helping ease grocery costs and encourage spending at traditional markets.   Vice Minister Lee visited an on-site rebate booth at Gongneung Dokkaebi Market to review its operations. The government has improved the process to make it more convenient for consumers and reduce waiting times. It has combined rebate booths for agricultural and livestock products with those for fisheries products and increased the availability of mobile queueing systems, ticketing kiosks, and on-site staff. Vice Minister Lee reviewed whether these improvements were working smoothly on the ground and looked into any inconvenience experienced by consumers. He called for seamless implementation of the rebate program so that it can help ease grocery costs while boosting sales at traditional markets and small businesses.   The government also plans to expand support to revitalize traditional markets and local economies. The 2027 budget proposal includes KRW 42.7 billion for a traditional market development program linking markets with regional tourism and cultural assets, up 35.6 percent from KRW 31.5 billion in 2026. It also allocates KRW 56.2 billion to a support program for traditional market safety management aimed at expanding safety facilities to better prepare for extreme heat and other risks, up 325.8 percent from KRW 13.2 billion in 2026. Furthermore, the government plans to invest KRW 80 billion in a lifestyle and cultural innovation support program, up 100 percent from KRW 40 billion in 2026, to strengthen the underlying competitiveness of small businesses through support for product innovation, branding and market development.   Vice Minister Lee said, “Traditional markets are among the places where people’s daily lives and local economies most directly intersect. We will continue to closely monitor consumer prices and the challenges facing traditional markets and small businesses, while carefully tracking implementation to ensure that the policy measures to stabilize people’s livelihoods are carried out smoothly on the ground.”   He added, “Alongside mitigating the immediate burdens on people’s livelihoods, it is equally important to strengthen the ability of small businesses to thrive on their own. We will faithfully reflect voices from the ground in our policies and swiftly implement measures that deliver tangible benefits to the public, so that the benefits of the economic recovery can reach small businesses and communities across the country.” Please refer to the attached files. 

On September 18, Deputy Prime Minister and Minister of Finance and Economy Koo Yun Cheol chaired the Emergency Economic Headquarters Meeting and the Ministerial Meeting on Economic Affairs at the Government Complex Sejong.   Deputy Prime Minister Koo noted that despite challenging external conditions, including the conflict in the Middle East, the Korean economy continues to demonstrate solid fundamentals; exports have increased significantly, domestic demand, including consumption, has continued to improve, and global credit rating agencies Moody’s and Fitch have also positively assessed Korea’s robust economic growth.   Deputy Prime Minister Koo went on to note that uncertainty surrounding the situation in the Middle East has recently increased again, as reflected in the sharp rise in global oil prices; against this backdrop, the government will remain vigilant, maintain its emergency response system, and make every effort to ensure stable energy supply and prices. He added that active diplomatic efforts, diversification of import sources, and strategic oil reserve swaps are expected to prevent major disruptions to energy supply for the time being, and that the government will operate a joint monitoring team with the refining industry to review crude oil supply conditions on a daily basis and take necessary measures promptly.   At the meeting, participants discussed the status of the government’s response to the Middle East conflict, the designation of the 10th round of maximum petroleum product prices, fuel tax policy from October onward, and measures to reduce fuel prices at highway gas stations and EV charging fees during the Chuseok holiday.   After a comprehensive review of recent global oil price developments and the burden on households, the government will announce at 6:00 p.m. on September 18 the 10th round of maximum petroleum product prices, which will take effect at midnight on September 19. Furthermore, to ease the public’s fuel cost burden amid the recent rise in oil prices, the government will extend the fuel tax cuts, currently scheduled to expire at the end of this month, for an additional two months through the end of November. The 15 percent tax cut on gasoline will remain in place, while the higher 25 percent tax cuts will be maintained on diesel, which is essential for industry and logistics, as well as on butane, widely used to fuel small trucks and other vehicles used for livelihoods.   During the Chuseok holiday from September 24 to 27, the government will also reduce fuel prices at highway gas stations nationwide by KRW 100 per liter from their September 17 levels, with the public sector bearing part of the burden of high fuel prices and helping meet public expectations for service innovation at highway service areas. EV charging fees will also be discounted during daytime hours over the holiday, when supplies of solar and other renewable energy are abundant, so that the benefits of expanded renewable energy deployment can be passed on to the public. Going forward, the government will continue to closely review overall conditions affecting people’s livelihoods, including prices, and implement measures that deliver tangible relief to the public. Please refer to the attached files.