Finance Ministry to focus on 'a vibrant economy' in 2024

Finance Minister Choi Sang-mok gives a New Year's address in a meeting with leaders in the financial industry at Lotte Hotel in central Seoul on Wednesday. [YONHAP]

Korea’s Ministry of Economy and Finance on Thursday announced four major pillars of the economic policy for 2024 under the theme, “A vibrant economy for the people.”

The four pillars — economic recovery, management of potential risks, creation of a dynamic economy and support for the future generation — were announced amid high inflation and interest rates that are restricting private spending and construction investment.

To revive the economy for the people, the ministry aims to expand tax benefits for consumers and offer tax incentives for corporations that invest in research and development (R&D). It also aims to attract a record $35 billion in foreign investment by securing large overseas projects and improve regulations that currently hinder investment.

To manage potential risks, the ministry will execute 85 trillion won ($65 billion) worth of liquidity programs in a bid to lead the soft landing of a property market facing risks related to project financing (PF) loans. Concerns escalated after Taeyoung Engineering & Construction, Korea’s mid-sized builder, applied for a debt restructuring program in late December due to a liquidity shortage over real estate PF loans.

The ministry also aims to reduce Korea’s household debt-to-gross domestic product ratio to below 100 percent by 2027. The ratio was 101.7 percent as of the second quarter.

For a dynamic economy, the government will finance 2 trillion won through 2027 into a fund for startups and strengthen policies to attract economic activity from women and youth.

For the future generation, the ministry aims to legalize fiscal rule and reform the national pension.

BY JIN MIN-JI [jin.minji@joongang.co.kr]