Deputy Prime Minister and Minister of Economy and Finance Lee Hyung-il emphasized South Korea's economic growth and fiscal stability during discussions with major global credit rating agencies. He also signed a memorandum of understanding (MOU) with the European Bank for Reconstruction and Development (EBRD) and the Central American Bank for Economic Integration (CABEI) to enhance international economic cooperation, particularly in artificial intelligence (AI).
According to the Ministry of Economy and Finance, Lee held a total of 11 meetings on October 16 in Bangkok, Thailand, during the annual meetings of the International Monetary Fund (IMF) and the World Bank (WB). These discussions included key officials from major multilateral development banks (MDBs) and representatives from the United States, Switzerland, Saudi Arabia, and Poland.
Credit Rating Agencies Reaffirm Stability of South Korea's Credit Rating
In meetings with representatives from Moody's, Fitch, and Standard & Poor's (S&P), Lee explained that South Korea is expected to achieve over 3% growth this year, driven by strong semiconductor exports and increased capital investment. He also outlined plans to enhance future growth drivers through three mega-projects, seven seed projects, and the Korean Green Transition (K-GX).
Lee discussed policies aimed at reducing polarization for sustainable growth. The government has identified housing, job creation, and financial support for low-income households as three core social policies and is working to alleviate polarization across various sectors, including businesses, generations, assets, income, and regions. He particularly highlighted initiatives like the 'K-New Deal Academy' aimed at expanding job opportunities for youth.
Credit rating agencies expressed interest in fiscal policies and strategies for utilizing additional tax revenues, including the future response fund. Lee explained that the government is accumulating surplus resources through the future response fund to adapt to changing economic conditions and is using excess tax revenues to stabilize the national bond market by reducing the issuance of government bonds.
The agencies reaffirmed that South Korea's national credit rating remains stable, noting that growth, fiscal soundness, and external indicators are on a steady path. They assessed that the boom in semiconductors and AI is offsetting concerns about growth slowdowns due to domestic and external uncertainties, such as aging and conflicts in the Middle East.
Lee also met with Valérie Wihbey, CEO of Euroclear Group, to discuss collaboration on utilizing government bonds as collateral and promoting transactions in Korean won. Euroclear previously supported the establishment of a consolidated account for Korean government bonds at the Korea Securities Depository in June 2024 to facilitate South Korea's inclusion in the World Government Bond Index (WGBI).
Strengthening AI and Digital Transformation Cooperation with EBRD and CABEI
Lee further solidified cooperation with MDBs by signing MOUs with Odile Renaud-Basso, President of EBRD, and Hicela Sanchez, President of CABEI, to establish AI cooperation hubs in South Korea. The initiative aims to combine South Korea's technological capabilities with the development cooperation strengths of MDBs to support AI transitions in developing countries.
Discussions with EBRD included follow-up actions for establishing and operating the AI hub, as well as expanding cooperation in the energy and nuclear sectors. EBRD expressed interest in South Korea's small modular reactor (SMR) technology and indicated a willingness to enhance collaboration. An MOU was also signed with CABEI for the establishment of an AI and digital transformation center and an agreement to set up a Korean office. Both parties agreed to establish a legal foundation for the existing CABEI Korean office and to identify AI cooperation projects.
Additionally, Lee emphasized the need for increased participation of South Korean personnel in international financial institutions during discussions with the presidents of ADB, EBRD, and CABEI. The MDB leaders expressed agreement and responded positively.
Bilateral Meetings with Major Countries Discuss Economic Cooperation
In bilateral meetings with major countries, Lee discussed economic and financial cooperation as well as collaboration in strategic industries. In addition to a four-party meeting between South Korean and U.S. financial and monetary authorities on October 16, Lee confirmed ongoing discussions with Francis Brooke, Deputy Secretary of the U.S. Treasury, regarding South Korea-U.S. economic and financial cooperation and the importance of maintaining close communication.
Lee also explored opportunities for expanding cooperation in advanced fields such as AI, research and development (R&D), and biotechnology with Swiss President Guy Parmelin. He expressed interest in Switzerland's foreign exchange policies and the resilience of its economy amid global uncertainties.
With Saudi Arabian Finance Minister Mohammed bin Abdullah Al-Jadaan, Lee discussed cooperation in energy, defense, infrastructure, and sovereign wealth funds. He introduced plans for establishing a strategic sovereign wealth fund in South Korea and requested the sharing of experiences and expertise from the Saudi sovereign wealth fund (PIF). In discussions with Polish Finance Minister Andrzej Domański, they addressed defense cooperation and G20 collaboration, agreeing to expand the scope of cooperation between the two countries.
* This article has been translated by AI.
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