Bank of Korea Governor Shin Hyun-sung stated on May 28 that the ongoing semiconductor boom will lead to increased benefits for all citizens through fiscal measures.
During a press conference following the Monetary Policy Committee meeting, Shin noted that the bonuses distributed due to the semiconductor boom will be subject to income tax, contributing to a trickle-down effect. He anticipates that these benefits will materialize through government spending next year.
He added, "While the semiconductor sector will initially reap the most benefits, it is inaccurate to say there will be no trickle-down effects. The positive impact will extend to wage increases, facility investments, construction investments, and overall consumption in the economy."
Regarding the significant rise in Gross Domestic Income (GDI) in the first quarter of this year, Shin explained, "The increase in GDI compared to Gross Domestic Product (GDP) is largely due to the price effect from export prices rising more than costs. Even though oil prices have increased, the substantial rise in semiconductor prices has led to a higher GDI increase this time."
The Bank of Korea has revised its economic growth forecast for this year upward from 2.0% to 2.6% due to the semiconductor boom. Despite downward pressure on the economy from the conflict in the Middle East, analysts believe growth will expand thanks to the strong semiconductor market.
Shin remarked, "The conflict in the Middle East is expected to lower the growth rate by 0.4 percentage points, but the stronger-than-expected semiconductor market and the resulting increase in IT exports will raise the growth rate by about 0.7 percentage points. Additionally, government supplementary budgets and a booming stock market are projected to contribute 0.2 and 0.1 percentage points to growth, respectively."
He also mentioned the potential inflationary pressures arising from Samsung's bonuses, stating, "The bonuses from Samsung could lead to increased demand through higher purchasing power, which may create inflationary pressures."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.