Yoon touts economy as exports power $30B current accounts surplus

President Yoon Suk Yeol, right, bangs the gavel to start his last Cabinet meeting of the year at the Sejong government complex on Tuesday. [PRESIDENTIAL OFFICE]

President Yoon Suk Yeol said Tuesday that Korea expects to log a current account surplus of $30 billion this year, expressing hopes that improved exports will power economic recovery and growth in 2024.

"The trade deficit that had lasted for 15 months began turning into a surplus in June, and a current account surplus of $30 billion is expected this year," Yoon said during the last Cabinet meeting of the year at the Sejong government complex. "Improved exports are expected to drive economic recovery and growth next year."

Yoon pointed to an analysis by the Economist, a British weekly business magazine, that recently found Korea ranking second in economic performance this year among the 35 member states of the Organisation for Economic Co-operation and Development (OECD).

"This can be thanks to the public and businesspeople who trusted in and cooperated with the government, which has been trying to restore the collapsed finances and market economy, even as most countries are experiencing 'stagflation' due to high prices and economic decline," Yoon said.

"The public and private sectors have been pioneering the global market together to create a business-friendly environment by breaking down killer regulations to meet global standards and expand the playing field for Korean companies."

On Dec. 17, the Economist reported it had compiled data on five economic and financial indicators — inflation, inflation breadth, GDP, jobs, and stock market performance — for "35 mostly rich countries," creating an overall score to rank them.

Korea placed second on the OECD list with core inflation of 3.2 percent, inflation breadth of minus 13.3 percent, GDP growth of 1.6 percent, an employment increase of 1.1 percent and share price return of 7.2 percent. Greece topped the charts, and the United States placed third.

"The reason I put the economy at the center of diplomacy and travel to overseas markets without rest with many businesspeople is because I believe that such visits create jobs and livelihood for the people," Yoon said.

He added that the government also plans to "intensively support the service industry" so that the export-centered recovery can lead to a recovery in domestic demand.

Yoon also addressed the dire birthrate situation in the country and said that "there isn't much time" left, calling on all ministries to tackle the issue with renewed determination.

"When it comes to the low birthrate issue, we need to take the situation more seriously and contemplate causes and solutions at a different level than before," Yoon said.

He noted that the public is aware, based on more than 20 years of experience, that simply "collecting good policies cannot be a solution to the low birthrate."

Korea's fertility rate, already the lowest in the world, reached a record quarterly low of 0.7 in the third quarter of 2023, between July and September, according to the latest data from Statistics Korea.

The rate was much lower than the replacement level of 2.1, which is necessary to maintain population stability at 51 million.

"As many experts point out, if the excessive competitive system in all fields, including education, is the direct cause, we must focus on fixing it," Yoon added.

"For childbirth incentives to be a reliable measure to address low birthrates, we need to not only provide universal support but also find what is absolutely necessary through empirical analysis and provide reliable aid."

His remarks appeared to address the issue that the fertility rate is declining further even after the government has spent astronomical figures on measures to cope with the low birthrate for decades.

Experts have been calling to improve the low birthrate policy from the ground up through selection and concentration based on scientific data instead of wasting taxpayers' money without concrete goals and estimates of the cost.

Yoon also emphasized his commitment to completing three key reforms in pensions, labor and education, which he said are vital tasks for his administration to pursue to "increase the growth potential of Korea."

He called on ministers to strengthen interagency cooperation to complete such tasks, promising to provide institutional support to break down barriers between ministries.

Yoon said it was meaningful to hold his last Cabinet meeting in Sejong as a part of his pledge to realize a "local era."

BY SARAH KIM [kim.sarah@joongang.co.kr]