The South Korean government announced a series of ambitious policy measures on Friday, aimed at supporting what it calls a "great economic leap" to establish the nation as a global leader in key industries and set the economy on a path for a rebound in its potential growth rate.
According to the plan, the government projects real Gross Domestic Product (GDP) to grow by 2% this year, stating that 2026 will mark the beginning of a rebound in the country's potential growth rate.
"This is a master plan to lay the groundwork for a great economic leap," said Choi Si-hoo, an official from the Ministry of Economy and Finance, noting that the government will proactively advance a series of policy initiatives to achieve this goal.
The finance ministry stated that to fundamentally transform the nation's growth model, the government has identified four key policy directions.
First, the government plans to invest in strategic national industries, in line with the Yoon Suk Yeol administration's five-year economic plan, to enhance potential growth and build a so-called "super innovative economy."
"We will invest in national strategic industries to create a super innovative economy, strengthen strategic economic cooperation, and support these efforts through productive finance and human capital expansion," the ministry said.
Key initiatives include propelling South Korea to become the world's second-largest semiconductor power. To achieve this, the government will establish a special committee under the presidential office dedicated to boosting the global competitiveness of the semiconductor industry.
The government also plans to develop the defense industry into one of the world's top four, foster the biotechnology sector, and enhance the competitiveness of core industries such as petrochemicals and steel.
Furthermore, the government aims to position South Korea among the top three global powers in artificial intelligence (AI) through a comprehensive transformation covering infrastructure, technology, industry, and human resources.
Second, the government plans to actively manage the macroeconomic environment by stimulating economic growth, stabilizing consumer prices, and preemptively addressing potential risks.
"We will maintain price stability while actively managing potential risks in the foreign exchange, real estate, and financial markets," said First Vice Finance Minister Lee Hyoung-il.
The finance ministry stated that in response to increased volatility in the foreign exchange market in recent months, the government's goal is to curb fluctuations and address structural supply-demand imbalances.
Third, the government will commit to addressing structural challenges by promoting balanced growth and reducing polarization.
Since President Yoon took office, the government has pledged to strengthen balanced regional development by expanding budgetary support for areas outside the capital region.
Finally, the policy focus will be on laying the groundwork for the great economic leap through regulatory reforms and proactive measures to increase national wealth.
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