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IMF tips hastened economic recovery for Korea

Published: 05 Sep. 2023, 18:27

JIN MIN-JI
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Finance Minister Choo Kyung-ho speaks during a virtual meeting with the International Monetary Fund in Seoul on Sept. 5, 2023. [YONHAP]

The International Monetary Fund (IMF) has said Korea's latest restrictive monetary and budget policies are headed in the right direction and anticipated the economy will speed up recovery in the second half, Seoul's finance ministry said Tuesday.

Harald Finger, Korea missions chief at the Washington-based organization, made the remark during a virtual meeting with Finance Minister Choo Kyung-ho, according to the Ministry of Economy and Finance.

During the meeting between the IMF and the Korean government, Finger said Seoul's recent measures aimed at monetary and budgetary restraint were the "right set of policies," and advised Asia's No. 4 economy to maintain the tightening stance.

Last month, Korea's finance ministry proposed a budget of 656.9 trillion won ($492 billion) for 2024, up 2.8 percent from this year's budget of 638.7 trillion won.

It slowed sharply from the previous year's 5.1 percent rise and marked the slowest on-year growth since 2005.

Korea's central bank also held its key interest rate steady at 3.5 percent for the fifth straight time as it weighs a slowdown in growth amid moderating inflation.

The finance ministry said Finger gave a "positive assessment" of the 2024 budget plan and suggested Korea make efforts to promptly adopt the fiscal rule as well.

Finger added the Korean economy is expected to speed up its recovery for the remaining 2023 on the back of the improving chip cycle.

Yonhap