On May 20, First Vice Minister of Finance and Economy Lee Hyoung Il attended the Cabinet Meeting held at the Blue House, where he presented the key economic achievements of the first year of the People’s Sovereignty Government.

Since its launch, the People’s Sovereignty Government has faced the unprecedented challenge of restoring the Korean economy to a normal trajectory following the economic disruption caused by martial law. More recently, it has also had to navigate a complex global crisis driven by rapid changes in external economic conditions, including the Middle East conflict.

In response, the administration has focused on pursuing pragmatic policies aimed at delivering tangible benefits to businesses and the public, including special measures to stabilize consumer prices, an AI-driven industrial transformation, and efforts to revitalize the domestic capital market. These efforts have already produced visible outcomes within a short period of time, including a rebound in economic growth (3.6% in the first quarter of 2026) and the KOSPI surpassing the 7,000 mark. Specific achievements are as follows.

1. Economic Recovery and Accelerating Growth Momentum

1)      Following the rebound from the martial law shock (from 0.3% in the first half of 2025 to 1.7% in the second half of 2025, year-on-year), growth momentum strengthened further, with the economy recording growth of 3.6% in the first quarter of 2026. On a quarter-on-quarter basis, the economy grew by 1.7%, ranking first among major OECD economies reporting growth data to date.

2)      The recovery in economic growth contributed to improved corporate performance and domestic demand, creating a virtuous cycle in which stronger tax revenue further expanded the government’s revenue base.

^* Year-on-year change in national tax revenue (KRW trillion): -51.8 (2023) → -7.6 (2024) → +37.4 (2025)  →  +41.5 (projected for 2026)

3)      The government also achieved meaningful progress in regional job creation, becoming the only administration to record simultaneous increases in employment both nationwide and outside the Seoul metropolitan area.

^* Increase in employment nationwide (10,000 persons, y-o-y): 13.9 (during the 10 months prior to the administration’s inauguration) → 18.6 (during the 10 months following the inauguration)

Increase in employment outside the Seoul metropolitan area (10,000 persons, y-o-y): 3.6 → 16.6 over the same period

4)      Reflecting the acceleration in growth momentum, major domestic institutions and global investment banks have been revising upward their growth forecasts for the Korean economy this year.

^* Korea Development Institute (KDI): 1.9% → 2.5%; Average forecast of eight global investment banks: 2.1% → 2.6%

2. Enhancing Korea’s Global Economic Standing

1)      Korea’s ranking in global exports rose from eighth place (January – March 2025) to fifth place (January – March 2026). The current account balance also recorded an all-time high of USD 73.8 billion in the first quarter of 2026, amounting to nearly 60% of the country’s full-year current account surplus of USD 123.1 billion in 2025.

2)      With the KOSPI surpassing the 7,000 mark, the market capitalization of the Korean stock market rose significantly from thirteenth to eighth in the world (as of June 2, 2025).

3)      Following Korea’s inclusion in the World Government Bond Index (WGBI) on April 1, 2026, net purchases of Korean government bonds by foreign investors have increased^*, contributing to greater stability in the government bond and foreign exchange market.

^* Net purchases of Korean government bonds by foreign investors (KRW trillion, settlement basis): Monthly average of 4.3 (2023) →  8.8 (Apr. 2026)

4)      Reflecting these strong economic fundamentals, major global credit rating agencies have maintained Korea’s sovereign credit ratings with a “stable” outlook^*, providing further evidence of positive international assessments of the Korean economy.

^* Fitch (Jan. 30): AA-, Stable; Moody’s (Feb. 13): Aa2, Stable; S&P (Apr. 29): AA, Stable

3. Stable Management of Consumer Prices

1)      For the first time in 29 years, the government introduced a maximum price system for petroleum products while simultaneously implementing fuel tax cuts. As a result, consumer inflation was reduced by 0.6%p in March and 1.2%p in April compared with a scenario without the maximum price system and fuel tax reductions.

2)      Through the Ministerial Task Force on Consumer Price Management, chaired by the Deputy Prime Minister, the government closely monitored key livelihood-related items^*, while efforts to establish market order contributed to broader declines in food prices^**.

^* Measure to stabilize prices were introduced for school uniforms (Feb. 26), apartment maintenance fees (Mar. 26), and private education and telecommunications fees (Apr. 9), etc.

             ^** Change in consumer prices of processed food products (Apr. 2026 compared to May. 2025, %): Cooking oil -6.7; flour -4.6; sugar -4.4

3)      Supported by these policy measures, Korea’s consumer inflation has remained in the low 2% range despite the spillover effects of the Middle East conflict, staying below the levels recorded in many major economies.

^* Consumer inflation rates in major economies (%): Australia (Mar.) 4.6; OECD average (Mar.) 4.0; United States (Apr.) 3.8; United Kingdom (Mar.) 3.4; Germany (Apr.) 2.9; Korea (Apr.) 2.6

The people’s Sovereignty Government will continue to pursue a major economic transformation guided by the principles of “pragmatism and tangible results” in order to restore potential growth and ensure that the benefits of growth are broadly shared with the public.

Please refer to the attached files.