South Korean Economy at a Pivotal Point, Warns Finance Minister Choi Sang-mok

Seoul, South Korea – South Korea's finance minister, Choi Sang-mok, has expressed concern about the country's economy, which is at a crucial juncture due to a declining potential growth rate, driven by a lack of innovation and diminished momentum across various industries.

According to Yonhap News Agency, During a discussion session with experts and relevant institutions, Choi emphasized the urgency of addressing these economic challenges and securing long-term growth. The session, organized by the Ministry of Economy and Finance, focused on exploring strategies to overcome current economic hurdles and stimulate innovation.

Choi pointed out that high entry regulations and weakened growth pathways have hindered innovation, affecting the dynamism of industries and companies. This has led to a consistent decline in the potential growth rate of the South Korean economy. He stressed that 2024 represents a critical moment for an economic rebound and underscored the importance of resolving structural issues and fostering innovation.

According to policymakers, the country's potential growth rate, which measures the highest possible economic growth without inducing inflationary pressures, is estimated to be around 2 percent. This figure is influenced by demographic shifts and other challenges facing the country.

The government forecasts the economy to grow by 2.2 percent in 2024, buoyed by a rebound in the semiconductor cycle and rising exports. This projection, however, only slightly exceeds the potential growth rate and falls short of the anticipated global economic growth of about 2.9 percent for the year.

Choi, who recently assumed office, has committed to developing a comprehensive roadmap to achieve a "dynamic economy." Experts participating in the session echoed Choi’s concerns and highlighted the necessity of preparing for transitions to digital and green economies. They also stressed the need to enhance productivity and implement educational and labor reforms to improve social mobility, as reported by the ministry.

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