The South Korean economy is firm, and the government will take “bold and swift’’ actions if necessary to stabilize Asia’s fourth-largest economy, Korea’s Finance Minister Choi Sang-mok reiterated on Sunday.
“The Republic of Korea’s economic system remains resilient, and the government’s emergency response plans are working well,” Choi said in a press conference on Sunday afternoon after the ministry’s emergency economic meeting with other government departments.
“The government will stay vigilant.”
The meeting was held in response to growing economic uncertainty after the National Assembly on Saturday failed to impeach President Yoon Suk Yeol over his declaration of martial law on Tuesday night due to a vote boycott by an overwhelming majority of governing party lawmakers.
Denouncing the ruling People Power Party’s action as a second coup, the opposition Democratic Party vowed to continue filing an impeachment motion against Yoon every week until the president is ousted or resigns.
The impeachment vote result has heightened political uncertainty further in Korea, said political and economic analysts, who also warned the increased and persisting political risk would add to the woes of Asia’s fourth-largest economy, which was already teetering from slowing economy and fears for growing trade protectionism under President-elect Donald Trump’s new US government.
ACTIVE COMMUNICATION WITH FOREIGN INVESTORS
Choi, however, dismissed any major adverse impact of the current political upheaval on the economy, citing past turbulent times when the economy stayed somewhat resilient.
Instead, he urged the National Assembly and the government to work closely to ease economic and market uncertainties to restore investors’ confidence.
“It is important to preserve our country’s sovereign rating firm,” said Choi, adding that the government will actively communicate with foreign investors and the international community to make them understand better the Korean economic conditions and government measures.
Global credit rating agencies – Fitch Ratings, S&P and Moody’s – maintained their sovereign ratings of South Korea unchanged despite the martial law debacle.
Choi also pledged that the government will take prompt actions to deal with the growing uncertainty on the global trade front.
“We will swiftly respond to external uncertainties stemming from the new US government and stabilize the livelihood of our people,” said Choi. “We must not waste the critical time that determines the fate of our (mainstay) industries,” such as the semiconductor, shipbuilding, shipping and petrochemical sectors.
After the emergency meeting with other ministers from the Ministry of Trade, Industry and Energy, Ministry of SMEs and Startups and Ministry of Agriculture, Food and Rural Affairs, Choi met with Bank of Korea Governor Rhee Chang-yong and the chiefs of the Financial Services Commission and the Financial Supervisory Service to discuss measures to stabilize the country’s financial markets.
The four chiefs have met daily to discuss measures for financial market stabilization since the short-lived martial law decree.
The Korean won, however, weakened 1.8% against the US dollar in the past week due to the martial law-triggered political uncertainty, becoming the worst-performing Asian currency against the dollar.
The Korean government has been running a task force to monitor the country’s economy and financial markets since Thursday.
By Kyung-Min Kang and Sang-Yong Park
kkm1026@hankyung.com
Sookyung Seo edited this article.
